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As filed with the Securities and Exchange Commission on May 2, 2022

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F

ANNUAL REPORT PURSUANT TO SECTION 13 OfR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2021

Commission file number: 333-260701

Inter & Co, Inc.

(Exact Name of Registrant as specified in its charter)

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The Cayman Islands

(Jurisdiction of incorporation or organization)

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Av Barbacena, 1.219, 22nd Floor
Belo Horizonte, Brazil, ZIP Code 30 190-131
Telephone: +55 (31) 2138-7978

(Address of principal executive offices)

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Securities registered or to be registered pursuant to Section 12(b) of the Act:

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Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: Class A common shares (not yet issued)

The number of outstanding shares of each class of stock of Inter & Co, Inc. as of December 31, 2021 was:

228,521,790 common shares, each with par value of US$0.00001

37,718,654 preferred shares, each with par value of US$0.00001

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No þ

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐ No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes þ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of “accelerated filer,” “large accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 ☐ Item 18 ◻

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No þ

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Unless otherwise indicated or the context otherwise requires, all references to “Inter & Co,” “Inter,” the “Company,” “we,” “our,” “ours,” “us” or similar terms refer to Inter & Co, Inc. (formerly known as Inter Platform, Inc.), together with its subsidiaries (including Banco Inter S.A. and its subsidiaries); all references to “Banco Inter” refer to Banco Inter S.A., a Brazilian corporation and its operating subsidiaries; all references to our “controlling shareholder” are to Mr. Rubens Menin Teixeira de Souza and/or the vehicles through which he holds his equity interest in Inter & Co and Costellis International Limited, as applicable; and all references to the “Corporate Reorganization” refer to a proposed corporate reorganization of Banco Inter. For more information on the Corporate Reorganization, see “Item 4. Information on the Company— A. History and Development of the Company—Inter & Co and the Corporate Reorganization.” We have approved the adoption of amended and restated memorandum and articles of association which will become effective immediately after the approval of the Corporate Reorganization by the shareholders of Banco Inter, or the Articles of Association. Unless otherwise stated, references to and descriptions of provisions contained in our articles of association are to the Articles of Association (as effective after the approval of the Corporate Reorganization).

The term “Brazil” refers to the Federative Republic of Brazil and the phrase “Brazilian government” refers to the federal government of Brazil. “Central Bank” refers to the Brazilian Central Bank (Banco Central do Brasil). References to “real,” “reais” or “R$” refer to the Brazilian real, the official currency of Brazil and references to “U.S. dollar,” “U.S. dollars” or “US$” refer to U.S. dollars, the official currency of the United States.

Financial Statements

Unless otherwise noted, the consolidated financial information contained in this annual report is derived from our audited consolidated financial statements as of December 31, 2021 and 2020 and for each of the years in three-year period ended December 31, 2021, included elsewhere in this annual report, or Audited Financial Statements. Our Audited Financial Statements have been prepared in accordance with International Financial Reporting Standards, or IFRS issued by the International Accounting Standards Board (IASB).

Financial Information

Inter & Co was incorporated on January 26, 2021, as a Cayman Islands exempted company with limited liability duly registered with the Cayman Islands Registrar of Companies. Inter & Co is currently a holding company through which the controlling shareholder and another founding shareholder of Banco Inter hold their Banco Inter shares. As of the date of this annual report, Inter & Co currently has no material assets other than shares of Inter Holding Financeira S.A., a corporation (sociedade por ações) incorporated under the laws of the Federative Republic of Brazil and wholly owned by Inter & Co, or HoldFin, and HoldFin has no material assets other than shares of Banco Inter. Neither Inter & Co nor HoldFin has any material liability or contingency.

Banco Inter is a publicly held company with equity securities listed on B3 since April 2018. On May 7, 2021, Inter & Co and Banco Inter completed a corporate reorganization consisting of:

As a result, Inter & Co and HoldFin became the indirect and direct controlling entities of Banco Inter, respectively. The ultimate shareholders of Banco Inter, and their voting and non-voting interests in Banco Inter, were the same before and after the above steps were completed. Inter & Co has accounted for this first step of the reorganization as a reorganization of entities under common control, and the pre-reorganization carrying amounts of Banco Inter’s consolidated assets and liabilities were reflected in Inter & Co’s consolidated financial statements with no fair value adjustments. As a result, the Audited Financial Statements reflect:

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This financial information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Audited Financial Statements, including the notes thereto, included in this annual report.

Currency Information

We maintain our books and records in reais, which is the functional currency of all of our material operating entities as well as our reporting currency.

All references herein to the “real,” “reais” or “R$” are to the Brazilian real, the official currency of Brazil. All references to “U.S. dollars,” “dollars” or “US$” are to U.S. dollars, the official currency of the United States of America. Solely for the convenience of the reader (unless otherwise stated), we have translated certain amounts included in “Summary Consolidated Financial Information and Other Data,” and elsewhere in this annual report from reais into U.S. dollars using the selling rate as reported by the Central Bank as of March 31, 2022, of R$4.7378 to US$1.00. The selling rate as reported by the Central Bank as of December 31, 2021 was R$5.5805 to US$1.00, compared to R$4.7378 to US$1.00 as of March 31, 2022, representing a 15.1% appreciation of the Brazilian currency in the first three months of 2022. The real/U.S. dollar exchange rate fluctuates widely, and the selling rate as of March 31, 2022, may not be indicative of future exchange rates. See “Item 5. Operating and Financial Review and Prospects — A. Operating Results — Exchange Rates” for information regarding historical exchange rates for the Brazilian currency.

The U.S. dollar equivalent information presented in this annual report is provided solely for the convenience of investors and should not be construed as implying that the amounts in reais represent, or could have been or could be converted into, U.S. dollars at such rates or at any other rate.

Market and Other Information

This annual report contains information, including statistical and other information relating to the industry in which we operate, obtained from reports prepared by independent consultants, governmental agencies and general publications, including the Central Bank, the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística), or IBGE, the Getúlio Vargas Foundation (Fundação Getúlio Vargas), or FGV, B3 – Balcão B3, or CETIP, Focus Economics, the U.S. Census Bureau and the Brazilian Federation of Banks (Federação Brasileira de Bancos), or FEBRABAN.

Industry publications generally state that the information they include has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Although we have no reason to believe any of this information or these reports are inaccurate in any material respect and believe and act as though they are reliable, neither we nor our agents have independently verified them. Governmental publications and other market sources, including those referred to above, generally state that their information was obtained from recognized and reliable sources, but the accuracy and completeness of that information is not guaranteed. In addition, the data that we compile internally and our estimates have not been verified by an independent source. None of the publications, reports or other published industry sources referred to in this annual report were commissioned by us or prepared at our request. We have not sought or obtained the consent of any of these sources to include such market data in this annual report.

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Rounding

Certain percentages and other amounts included in this annual report have been rounded for ease of presentation. Accordingly, figures shown as totals in certain tables may not be an arithmetical aggregation of the figures that precede them.

Calculation of NPS

Net promoter score, or NPS, is a widely used survey methodology that measures the willingness of customers to recommend a company’s products and services. NPS measures satisfaction using a scale of zero to 10 based on a customer’s response to the question of how likely that person is to recommend us to a friend or colleague. Responses of nine or ten are considered “promoters.” Responses of seven or eight are considered neutral. Responses of six or less are considered “detractors.” The NPS, a percentage expressed as a numerical value, is calculated by subtracting the percentage of respondents who are detractors from the percentage who are promoters and dividing that number by the total number of respondents. The NPS calculation gives no weight to customers who decline to answer the survey question. Our NPS calculation as of a given date reflects the answers collected between the first and the last day of the month evaluated. We believe that NPS provides us with useful insight on our customers’ subjective perception and satisfaction with our products and services. We use this metric to monitor the effect our customer-focused initiatives have on our customers’ satisfaction.

Certain Performance Metrics

In this annual report, we present the indicators of our performance described below. There is no standard definition for any of these indicators and our definition of these measures may differ from the definition used by other companies.

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FORWARD-LOOKING STATEMENTS

This annual report contains or may contain “forward-looking statements.” Forward looking terms such as “may,” “will,” “could,” “should,” “would,” “plan,” “potential,” “intend,” “anticipate,” “project,” “target,” “believe,” “estimate” or “expect” and other words, terms and phrases of similar nature are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are statements which are not historical fact and involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. Such forward-looking statements may include, but are not limited to, statements related to:

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The list above is not intended to be exhaustive, and there may be other key risks that are not listed above that are not presently known to us or that we currently deem immaterial. Should one or more of these or other risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may vary in material respects from those expressed or implied by the forward-looking statements made by us contained in this annual report. As a result of the foregoing, readers should not place undue reliance on the forward-looking statements contained in this annual report. The forward-looking statements contained in this annual report are expressly qualified in their entirety by the foregoing cautionary statements. All such forward-looking statements are based upon information available as of the date of this annual report or other specified date and speak only as of such date. We disclaim any intention or obligation to update or revise any forward-looking statements in this annual report as a result of new information or future events, except as may be required under applicable securities law.

Forward-looking statements in this annual report are based on current expectations and assumptions made by our management. Although our management believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements. We can give no assurance that they will prove to be correct. Additionally, forward-looking statements are subject to various risks and uncertainties which could cause actual results and experience to differ materially from the anticipated results or expectations expressed in this annual report. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements, or that could contribute to such differences, include, without limitation, the risks and uncertainties set forth under the section “Item 3. Key Information—D. Risk Factors.”

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Risks Related to the Corporate Reorganization and Inter & Co Common Shares

If we complete the Corporate Reorganization, our controlling shareholder will own all of Inter & Co Class B common shares, which will represent approximately 80% of the voting power of Inter & Co’s issued share capital following the Corporate Reorganization, and will control all matters requiring shareholder approval.

Following the Corporate Reorganization, our controlling shareholder will control Inter & Co through the ownership of all of Inter & Co Class B common shares and, therefore, approximately 80% of Inter & Co’s voting capital. Inter & Co Class B common shares are entitled to 10 votes per share and Inter & Co Class A common shares are entitled to one vote per share. As a result, our controlling

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shareholder will control the outcome of all decisions at Inter & Co general meetings, and will be able to elect a majority of the members of Inter & Co board of directors. They will also be able to direct our actions in areas such as business strategy, financing, distributions, acquisitions and dispositions of assets or businesses. For example, our controlling shareholder may cause us to make acquisitions that increase the amount of our indebtedness or outstanding Inter & Co Class A common shares, sell revenue-generating assets or inhibit change of control transactions that may benefit other shareholders. The decisions of our controlling shareholder on these matters may be contrary to your expectations or preferences, and they may take actions that could be contrary to your interests. For further information regarding shareholdings in Inter & Co, see “Item 7. Major Shareholders and Related Party Transactions.” So long as our controlling shareholder beneficially own a sufficient number of Inter & Co Class B common shares, even if they beneficially own significantly less than 50% of our outstanding share capital, they will be able to effectively control our decisions.

Currently, our controlling shareholder beneficially own 31% of the issued share capital of Banco Inter through their indirect ownership of 53% of Banco Inter common shares and 9% of Banco Inter preferred shares, and consequently, 53% of the voting power of Banco Inter’s issued share capital. Assuming that no Banco Inter shareholder eligible to elect to receive Cash Redeemable Shares pursuant to the terms described in the registration statement and prospectus relating to the Corporate Reorganization, or Eligible Shareholder, elects to receive Cash Redeemable Shares, Banco Inter controlling shareholder will hold 27.2% of the then-outstanding Inter & Co shares and 78.9% of the aggregate voting power of Inter & Co. Assuming that Eligible Shareholders elect to receive Cash Redeemable Shares resulting in an aggregate cash payment in the amount of the Cash Redemption Threshold, Banco Inter controlling shareholder will hold 29.2% of the then-outstanding Inter & Co shares and 80.5% of the aggregate voting power of Inter & Co. The exact percentage of the then-outstanding Inter & Co shares and aggregate voting power of Inter & Co that will be held by the controlling shareholder upon completion of the Corporate Reorganization will vary depending on the number of Eligible Shareholders that opt to receive Cash Redeemable Shares.

Holders of Banco Inter preferred shares do not have voting rights, except in exceptional cases such as in connection with corporate transformation, merger, consolidation or spin-off involving Banco Inter; approval of certain transactions between Banco Inter and its controlling shareholder, acting directly or through any third party, approval of the valuation of assets contributed to our capital stock in a capital increase, among others. Particularly in connection with these matters, the Corporate Reorganization will result in additional voting power to the controlling shareholder.

Our major shareholders are not subject to lock-up restrictions and may sell Inter & Co Class A Shares at any time, subject to applicable law. Holders of Inter & Co Class B common shares have preemptive rights to acquire shares that we may sell in the future, which may impair our ability to raise funds.

Our controlling shareholder, other affiliates and other major shareholders (such as SoftBank and Hottaire) will not be subject to any lock-up obligation. If our controlling shareholder or other major shareholders sell a large number of their Inter & Co Class A common shares, the market price of Inter & Co Class A common shares may decline significantly. These sales, or the possibility that these sales may occur, might also make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. Our controlling shareholder and SoftBank will benefit from registration rights pursuant to the SoftBank Shareholders’ Agreement which will become effective upon the consummation of the SoftBank Roll-Up and may demand that Inter & Co file a resale registration statement at any time after the Closing Date.

Under Inter & Co’s Articles of Association, the holders of Inter & Co Class B common shares are entitled to preemptive rights to purchase, at the same economic terms and at the same price, additional common shares if there is an increase in our share capital and additional common shares are issued, in order to maintain their proportional ownership interests. The exercise by holders of Inter & Co Class B common shares of their preemptive rights may impair our ability to raise funds, or adversely affect the terms on which we would otherwise be able to raise funds, as we may not be able to offer to new investors the quantity of our shares that they may desire to purchase. For more information, see “Item 10. Additional Information — B. Memorandum and Articles of Association — Preemptive or Similar Rights.”

Each Class B common share may be converted into one Class A common share (i) upon delivery of notice to Inter & Co, at its registered office, in the form described in our Articles of Association, or (ii) automatically upon any transfer of such Class B common share, whether or not for value, except for certain limited transfers described in our Articles of Association. Class B common shares may also be converted into Class A common shares in other circumstances.

Our Class B common share are generally automatically converted into one Class A common share upon any transfer of such Class B common share, whether or not for value, except for certain limited transfers described in our Articles of Association and in “Inter

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& Co - Share Capital—Conversion Rights.” In addition, our Articles of Association could be amended to permit additional exceptions to the automatic conversion of Class B common shares into Class A Shares upon their transfer, by a special resolution approved affirmative vote of at least two-thirds of the majority of those shareholders entitled to vote who are present in person or by proxy at a quorate general meeting. Our controlling shareholder would be allowed to vote its Class B Shares to approve such special resolution.

If holders of Inter & Co Class B common shares exercise the right to convert their Inter & Co Class B common shares into Inter & Co Class A common shares and sell a large number of their Inter & Co Class A common shares, the market price of Inter & Co Class A common shares may decline significantly.

There is no existing market for Inter & Co Class A common shares, and we do not know whether one will develop to provide you with adequate liquidity. If the trading price of Inter & Co Class A common shares fluctuates after completion of the Corporate Reorganization, you could lose a significant part of your investment.

Prior to the Corporate Reorganization, there has not been a public market for Inter & Co Class A common shares. Following the completion of the Corporate Reorganization, a significant number of Inter & Co Class A common shares will be held through Inter & Co BDRs, in Brazil, which may impact the liquidity and trading price of our Inter & Co Class A common shares. If an active trading market does not develop, you may have difficulty selling any of the Inter & Co Class A common shares that you receive as part of the Corporate Reorganization. We cannot predict the extent to which investor interest in us will lead to the development of an active trading market on Nasdaq or otherwise or how liquid that market might become.

As settlement of the Corporate Reorganization will occur on B3, a holder of Inter & Co BDRs that wants to receive Inter & Co Class A common shares must cancel Inter & Co BDRs so that the underlying Inter & Co Class A common shares can be delivered to its indicated brokerage account. It is expected that a majority of Inter & Co Class A common shares be held through Inter & Co BDRs, which may affect the liquidity and trading price of Inter & Co Class A common shares on Nasdaq.

We cannot assure you that the price for Inter & Co Class A common shares will reflect the price of Banco Inter Shares on B3 or that these prices will prevail in the market following the Corporate Reorganization. The price of Banco Inter Shares on B3 has been subject to volatility; the trading price of Banco Inter Units was R$31.55 on January 4, 2021, reached R$80.00 in the third quarter of 2021 and was R$15.60 on March 15, 2022. The market price of the Class A common shares may be influenced by many factors, some of which are beyond our control, including:

In addition, global stock market in general has experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular companies affected. These broad market and industry factors may

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materially harm the market price of Inter & Co Class A common shares. In the past, following periods of volatility in the market price of certain companies’ securities, securities class action litigation has been instituted against these companies. This litigation, if instituted against us, could adversely affect our financial condition or results of operations. If a market does not develop or is not maintained, the liquidity and price of Inter & Co Class A common shares could be seriously harmed.

We may (through HoldFin) incur debt to make the cash payment to Banco Inter Shareholders that elect to receive Cash Redeemable Shares. Repayment of this debt may be made with distributions received from Banco Inter (including dividends or capital reduction) or with proceeds of future equity offerings of Inter & Co, which may adversely impact the value of Inter & Co Class A common shares.

HoldFin has obtained from certain Brazilian financial institutions a commitment letter to provide financing to redeem Cash Redeemable Shares up to the amount of the Cash Redemption Threshold.

We may issue additional Inter & Co Class A common shares to redeem Cash Redeemable Shares or for other purposes, which may dilute your interest in Inter & Co’s share capital and affect the trading price of Inter & Co Class A common shares.

We may issue additional Inter & Co Class A common shares to redeem Cash Redeemable Shares or for other purposes, which may result in a dilution of your interest in Inter & Co’s share capital and affect the trading price of Inter & Co Class A common shares. The offering price in connection with equity offerings of Inter & Co may be less than the price we will pay to redeem Cash Redeemable Shares (as defined below). Current Banco Inter Shareholders will not have preemptive or priority rights to participate in a priority offering of Inter & Co Class A common shares.

We may also raise additional funds to grow our business and implement our growth strategy through public or private issuances of common shares or securities convertible into, or exchangeable for, Inter & Co shares, which may dilute your interest in Inter & Co’s share capital or result in a decrease in the market price of Inter & Co shares. In addition, we may also enter into mergers or other similar transactions in the future, which may dilute your interest in Inter & Co’s share capital or result in a decrease in the market price of Inter & Co shares. Any fundraising through the issuance of shares or securities convertible into or exchangeable for shares or the participation in corporate transactions with an effect similar to a merger, may dilute your interest in Inter & Co’s share capital or result in a decrease in the market price of Inter & Co Class A common shares.

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Failure to conclude the Corporate Reorganization after approval at Banco Inter Shareholders’ Meeting may adversely affect the market price of Banco Inter Shares.

The commitment letter in connection with the Cash Redemption Financing is subject to certain conditions, including the conclusion and execution of the definitive agreements, bringdown of representations and warranties of HoldFin, compliance with minimum regulatory capital requirements and payment of fees and other payment obligations under the commitment letter. If these conditions are not satisfied, we will not consummate the Corporate Reorganization.

Failure to conclude the Corporate Reorganization after its approval at the Banco Inter Shareholders’ Meeting may adversely affect the market price of Banco Inter Shares. The perception that many of Banco Inter shareholders are electing to receive Cash Redeemable Shares, even if the value to be paid does not exceed the Cash Redemption Threshold, may also adversely affect the market price of Banco Inter Shares.

If the aggregate amount to be disbursed by HoldFin to redeem Cash Redeemable Shares would exceed the Cash Redemption Threshold, Eligible Shareholders that elect to receive Cash Redeemable Shares will also receive Inter & Co BDRs. Certain investors may not be allowed to hold BDRs.

If the aggregate amount to be disbursed by HoldFin to redeem Cash Redeemable Shares would exceed the Cash Redemption Threshold, Eligible Shareholders that elect to receive Cash Redeemable Shares will also receive Inter & Co BDRs.

Certain investors may not be allowed to hold BDRs. If any such investor receives Inter & Co BDRs, it will be required to sell such security on the B3 at the prevailing price. We cannot guarantee that, if the Corporate Reorganization is approved, all Eligible Shareholders that elect to receive Cash Redeemable Shares will only receive Cash Redeemable Shares nor that there will be an active and liquid market for Inter & Co BDRs. Investors that are required to accept and then sell their Inter & Co BDRs may experience a substantial loss of the value of their initial investment in Banco Inter.

Our Articles of Association contain anti-takeover provisions that may discourage a third-party from acquiring us and adversely affect the rights of holders of Inter & Co Shares.

Our Articles of Association contain certain provisions that could limit the ability of others to acquire our control, including a provision that grants authority to our board of directors to establish and issue from time to time one or more series of preferred shares and to determine, with respect to any series of preferred shares, the terms and rights of that series. These provisions could have the effect of depriving our shareholders of the opportunity to sell their shares at a premium over the prevailing market price by discouraging third parties from seeking to obtain our control in a tender offer or similar transactions.

Likewise, the Shareholders’ Agreement between our controlling shareholder, Stone and other parties provides that Stone has a right of first refusal on certain transfers that would result in the change of Banco Inter control. Stone’s current shareholders’ agreement provides that, upon conclusion of a corporate reorganization (including corporate reorganizations such as the Corporate Reorganization), it will remain valid and binding and that the parties shall take all the measures required in such a way that the shareholders’ agreement will become binding on the company resulting from the corporate reorganization. For more information, see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Shareholders’ Agreements—Shareholders’ Agreement with Stone.”

Requirements associated with being a public company in the United States will require significant company resources and management attention.

Since the declaration of effectiveness of our registration statement on Form F-4, in November 2021, we have become subject to certain reporting requirements of the Exchange Act, and the other rules and regulations of the SEC and Nasdaq. We are also be subject to various other regulatory requirements, including the Sarbanes-Oxley Act. We expect these rules and regulations to increase our legal, accounting and financial compliance costs and to make some activities more time-consuming and costly. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantial costs to maintain the same or similar coverage. New rules and regulations relating to information disclosure, financial reporting and controls and corporate governance, which could be adopted by the SEC, Nasdaq or other regulatory bodies or exchange entities from time to time, could result in a significant increase in legal, accounting and other compliance costs and make certain corporate activities

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more time-consuming and costly, which could materially affect our business, financial condition and results of operations. These rules and regulations may also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers.

These new obligations will also require substantial attention from our senior management and could divert their attention away from the day-to-day management of our business. Given that most of the individuals who now constitute our management team have no experience managing a publicly traded company in the United States and complying with the increasingly complex laws pertaining to public companies, initially, these new obligations could demand even greater attention. These cost increases and the diversion of management’s attention could materially and adversely affect our business, financial condition and results of operations.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of Inter & Co Class A common shares and their trading volume could decline.

The trading market for Inter & Co Class A common shares will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on Inter & Co. If no or too few securities or industry analysts commence coverage of Inter & Co, the trading price for Inter & Co Class A common shares would likely be negatively affected. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade Inter & Co Class A common shares or publish inaccurate or unfavorable research about our business, the price of Inter & Co Class A common shares would likely decline. If one or more of these analysts ceases coverage of Inter & Co or fail to publish reports on us regularly, demand for Inter & Co Class A common shares could decrease, which might cause the price of Inter & Co Class A common shares and trading volume to decline.

Our holding company structure makes us dependent on the operations of our subsidiaries, one of which we derive a significant portion of our revenues from, and we may not pay any cash dividends in the foreseeable future.

Inter & Co is a Cayman Islands exempted company with limited liability. As a holding company, Inter & Co’s corporate purpose is to invest, as a partner or shareholder, in other companies, consortia or joint ventures in Brazil, where most of our operations are located, and outside Brazil. Accordingly, our material assets are our direct and indirect equity interests in our subsidiaries, and we are therefore dependent upon the results of operations and, in turn, the payments, dividends and distributions from our subsidiaries for funds to pay our holding company’s operating and other expenses and to pay future cash dividends or distributions, if any, to holders of Inter & Co Class A common shares, and we may have tax costs in connection with any dividend or distribution. In addition, the payments, dividends and distributions from our subsidiaries to us for funds to pay future cash dividends or distributions, if any, to holders of Inter & Co Class A common shares, could be restricted under financing arrangements that we or our subsidiaries may enter into in the future and we and such subsidiaries may be required to obtain the approval of lenders to make such payments to us in the event they are in default of their repayment obligations. Furthermore, we may be adversely affected if the Brazilian government imposes legal restrictions on dividend distributions by our Brazilian subsidiaries and exchange rate fluctuations will affect the U.S. dollar value of any distributions our subsidiaries make with respect to our equity interests in those subsidiaries.

Currently, all of our revenues are expected to be derived from Banco Inter and its subsidiaries. We expect that we will continue to depend on Banco Inter and its subsidiaries for a significant portion of our revenues for the foreseeable future, and any decrease in the revenue of Banco Inter and its subsidiaries or any other event significantly affecting Banco Inter and its subsidiaries may have a material adverse effect on our financial condition and results of operations.

The declaration, payment and amount of any future dividends will be made at the discretion of Inter & Co’s board of directors and will depend upon, among other things, the results of operations, cash flows and financial condition, operating and capital requirements, and other factors as Inter & Co’s board of directors considers relevant. There is no assurance that future dividends will be paid, and if dividends are paid, there is no assurance with respect to the amount of any such dividend. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Dividends and Dividend Policy” and “Item 10. Additional Information—B. Memorandum and Articles of Association—Dividends and Capitalization of Profits.”

Specifically, in Brazil, on May 29, 2020, in response to the ongoing uncertainty relating to the economic effects of the COVID-19 pandemic, the Central Bank of Brazil issued CMN Resolution No. 4,820/2020, or “CMN Resolution No. 4,820.” CMN Resolution No. 4,820 prohibited financial institutions and other institutions authorized to operate by the Central Bank of Brazil, including Banco Inter, to make dividend distributions in relation to the 2020 fiscal year beyond the minimum legal requirement or the

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minimum threshold established in such institutions’ organizational documents. Although this restriction applied only to the 2020 fiscal year, the Brazilian monetary authorities may introduce similar restrictions in the following fiscal years depending on the impacts of the COVID-19 pandemic or other macroeconomic factors.

In addition, the Brazilian Senate is discussing a tax reform which may encompass the taxation of dividends at 15% rate and the disallowance of payments of interest on shareholders’ equity (juros sobre o capital próprio). Any repeal of the income tax exemption on the distribution of dividends and any increase in applicable taxes on the payment of interest on shareholders’ equity may adversely affect us.

Our dual class capital structure means our shares will not be included in certain indices. We cannot predict the impact this may have on the trading price of Inter & Co Class A common shares.

In 2017, FTSE Russell, S&P Dow Jones and MSCI announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices to exclude companies with multiple classes of shares of common stock from being added to such indices. FTSE Russell announced plans to require new constituents of its indices to have at least five percent of their voting rights in the hands of public stockholders, whereas S&P Dow Jones announced that companies with multiple share classes, such as ours, will not be eligible for inclusion in the S&P 500, S&P MidCap 400 and S&P SmallCap 600, which together make up the S&P Composite 1500. MSCI also opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from its ACWI Investable Market Index and U.S. Investable Market 2500 Index; however, in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria. We cannot assure you that other stock indices will not take a similar approach to FTSE Russell, S&P Dow Jones and MSCI in the future. Under the announced policies, our dual class capital structure would make us ineligible for inclusion in any of these indices and, as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track these indices will not invest in our stock. It continues to be somewhat unclear what effect, if any, these policies will have on the valuations of publicly traded companies excluded from the indices, but in certain situations they may depress these valuations compared to those of other similar companies that are included. Exclusion from indices could make Inter & Co Class A common shares less attractive to investors and, as a result, the market price of Inter & Co Class A common shares could be adversely affected.

Inter & Co is a Cayman Islands exempted company with limited liability. The rights of Inter & Co shareholders, including with respect to fiduciary duties and corporate opportunities, may be different from the rights of shareholders governed by the laws of U.S. jurisdictions.

Inter & Co is a Cayman Islands exempted company with limited liability. Inter & Co corporate affairs are governed by its Articles of Association and by the laws of the Cayman Islands. The rights of Inter & Co shareholders and the responsibilities of members of Inter & Co’s board of directors may be different from the rights of shareholders and responsibilities of directors in companies governed by the laws of U.S. jurisdictions. In particular, as a matter of Cayman Islands law, directors of a Cayman Islands company owe fiduciary duties to the company and separately a duty of care, diligence and skill to the company. Under Cayman Islands law, directors and officers owe the following fiduciary duties: (1) duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole; (2) duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; (3) directors should not improperly fetter the exercise of future discretion; (4) duty to exercise powers fairly as between different sections of shareholders; (5) duty to exercise independent judgment; and (6) duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests. Inter & Co’s Articles of Association have varied this last obligation by providing that a director must disclose the nature and extent of his or her interest in any contract or arrangement, and following such disclosure, such director shall not vote in respect of any transaction or arrangement in which he or she is interested and shall not be counted in the quorum at the meeting. The resolution may be passed by a majority of the directors present at the meeting. Conversely, under Delaware corporate law, a director has a fiduciary duty to the corporation and its stockholders (made up of two components) and the director’s duties prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. See “Item 10. Additional Information—B. Memorandum and Articles of Association—Principal Differences between Cayman Islands and U.S. Corporate Law.”

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As a foreign private issuer and an “emerging growth company” (as defined in the JOBS Act), Inter & Co has different disclosure and other requirements than U.S. domestic registrants and non-emerging growth companies.

As a foreign private issuer and emerging growth company, Inter & Co is subject to different disclosure and other requirements than domestic U.S. registrants and non-emerging growth companies. For example, as a foreign private issuer, in the United States, Inter & Co is not subject to the same disclosure requirements as a domestic U.S. registrant under the Exchange Act, including the requirements to prepare and issue quarterly reports on Form 10-Q or to file current reports on Form 8-K upon the occurrence of specified significant events, the proxy rules applicable to domestic U.S. registrants under Section 14 of the Exchange Act or the insider reporting and short-swing profit rules applicable to domestic U.S. registrants under Section 16 of the Exchange Act. In addition, we intend to rely on exemptions from certain U.S. rules which will permit Inter & Co to follow Cayman Islands legal requirements rather than certain of the requirements that are applicable to U.S. domestic registrants.

We follow Cayman Islands laws and regulations that are applicable to Cayman Islands companies. However, Cayman Islands laws and regulations applicable to Cayman Islands companies do not contain any provisions comparable to the U.S. proxy rules, the U.S. rules relating to the filing of reports on Form 10-Q or 8-K or the U.S. rules relating to liability for insiders who profit from trades made in a short period of time, as referred to above.

Furthermore, foreign private issuers are required to file their annual report on Form 20-F within 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information, although Inter & Co will be subject to Cayman Islands laws and regulations having, in some respects, a similar effect as Regulation Fair Disclosure. As a result of the above, even though Inter & Co is required to file reports on Form 6-K disclosing the limited information which we have made or are required to make public pursuant to Cayman Islands law, or are required to distribute to shareholders generally, and that is material to us, you may not receive information of the same type or amount that is required to be disclosed to shareholders of a U.S. company.

The JOBS Act contains provisions that, among other things, relax certain reporting requirements for emerging growth companies. Under this act, as an emerging growth company, Inter & Co is not subject to the same disclosure and financial reporting requirements as non-emerging growth companies. For example, as an emerging growth company Inter & Co is permitted to, and intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Also, Inter & Co will not have to comply with future audit rules promulgated by the U.S. Public Company Accounting Oversight Board, or PCAOB, (unless the SEC determines otherwise) and Inter & Co’s auditors will not need to attest to Inter & Co’s internal controls under Section 404(b) of the Sarbanes-Oxley Act. We may follow these reporting exemptions until Inter & Co is no longer an emerging growth company. As a result, Inter & Co shareholders may not have access to certain information that they deem important. Inter & Co will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the Corporate Reorganization, (b) in which we have total annual revenues of at least US$1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of Inter & Co common shares that is held by non-affiliates exceeds US$700.0 million as of the prior June 30th, and (2) the date on which Inter & Co has issued more than US$1.0 billion in non-convertible debt during the prior three-year period. Accordingly, the information about us available to you will not be the same as, and may be more limited than, the information available to shareholders of a non-emerging growth company. Inter & Co could be an “emerging growth company” for up to five years, although circumstances could cause Inter & Co to lose that status earlier, including if the market value of Inter & Co common shares held by non-affiliates exceeds $700 million as of any June 30 (the end of our second fiscal quarter) before that time, in which case Inter & Co would no longer be an “emerging growth company” as of the following December 31 (our fiscal year end). We cannot predict if investors will find Inter & Co common shares less attractive because we may rely on these exemptions. If some investors find Inter & Co common shares less attractive as a result, there may be a less active trading market for our common shares and the price of our common shares may be more volatile.

Upon the listing of our common shares on Nasdaq, we will be a “controlled company” within the meaning of the rules of Nasdaq corporate governance rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to shareholders of companies that are subject to such requirements.

Immediately after the completion of the Corporate Reorganization, our controlling shareholder will beneficially own all of Inter & Co Class B common shares, representing a majority of the voting power of Inter & Co’s outstanding share capital. As a result, Inter & Co will be a “controlled company” within the meaning of the corporate governance standards of Nasdaq corporate governance

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rules. Under these rules, a company of which more than 50% of the voting power in the election or appointment of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements. For example, controlled companies, within one year of the date of the listing of their common shares:

Following the Corporate Reorganization, we intend to utilize these exemptions. However, we have adopted some governance practices, futher described elsewhere in this annual report, which to some extent mitigates the effect of such exemptions on our governance, such as the requirement in our Articles of Association that our board must have a minimum number –although less than half– of independent directors. As a result, we do not expect a majority of the directors on Inter & Co board will be independent upon the closing of the Corporate Reorganization. In addition, we do not expect that any of the committees of the board will consist entirely of independent directors upon the closing of the Corporate Reorganization. Accordingly, you will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

As a foreign private issuer, Inter & Co is permitted to, and will, rely on exemptions from certain Nasdaq corporate governance standards applicable to U.S. issuers, including the requirement that a majority of an issuer’s directors consist of independent directors. This may afford less protection to holders of Inter & Co Class A common shares.

Section 5605 of Nasdaq equity rules requires listed companies to have, among other things, a majority of their board members be independent, and to have independent director oversight of executive compensation, nomination of directors and corporate governance matters. As a foreign private issuer, however, Inter & Co permitted to, and will, follow home country practice in lieu of the above requirements. See “Item 10. Additional Information—B. Memorandum and Articles of Association—Principal Differences between Cayman Islands and U.S. Corporate Law.”

Inter & Co may lose its foreign private issuer status which would then require us to comply with the Exchange Act’s domestic reporting regime and cause us to incur significant legal, accounting and other expenses.

In order to maintain Inter & Co current status as a foreign private issuer, either (a) more than 50% of Inter & Co Class A common shares must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of Inter & Co executive officers or (b)(ii) directors may not be U.S. citizens or residents; (2) more than 50% of our assets cannot be located in the United States; and (3) our business must be administered principally outside the United States. If Inter & Co loses this status, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in Inter & Co corporate governance practices in accordance with various SEC and Nasdaq rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer may be significantly higher than the costs we will incur as a foreign private issuer.

Inter & Co shareholders may face difficulties in protecting their interests because Inter & Co is a Cayman Islands exempted company.

Inter & Co corporate affairs are governed by our Articles of Association, by the Companies Act (As Revised) of the Cayman Islands, or Companies Act, and the common law of the Cayman Islands. The rights of shareholders to take action against Inter & Co directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as that from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands. The rights of Inter & Co shareholders and the fiduciary responsibilities of Inter & Co directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less exhaustive body of securities laws than the

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United States. In addition, some U.S. states, such as Delaware, have more fulsome and judicially interpreted bodies of corporate law than the Cayman Islands.

While Cayman Islands law allows a dissenting shareholder to express the shareholder’s view that a court sanctioned reorganization of a Cayman Islands company would not provide fair value for the shareholder’s shares, Cayman Islands statutory law does not specifically provide for shareholder appraisal rights in connection with a merger or consolidation of a company that takes place (by way of a scheme of arrangement). This may make it more difficult for you to assess the value of any consideration you may receive in a merger or consolidation (by way of a scheme of arrangement) or to require that the acquirer gives you additional consideration if you believe the consideration offered is insufficient. However, Cayman Islands statutory law provides a mechanism for a dissenting shareholder in a merger or consolidation that does not take place by way of a scheme of arrangement to apply to the Grand Court of the Cayman Islands for a determination of the fair value of the dissenter’s shares if it is not possible for the company and the dissenter to agree on a fair price within the time limits prescribed.

Shareholders of Cayman Islands exempted companies have no general rights under Cayman Islands law to inspect corporate records and accounts or to obtain copies of lists of shareholders. Inter & Co directors have discretion under Inter & Co Articles of Association to determine whether or not, and under what conditions, Inter & Co corporate records may be inspected by Inter & Co shareholders, but are not obliged to make them available. This may make it more difficult for you to obtain information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

United States civil liabilities and certain judgments obtained against Inter & Co by Inter & Co shareholders may not be enforceable.

Inter & Co is a Cayman Islands exempted company and substantially all of our assets are located outside of the United States. In addition, the majority of Inter & Co directors and officers are nationals and residents of countries other than the United States. A substantial portion of the assets of these persons is located outside of the United States. As a result, it may be difficult to effect service of process within the United States upon these persons. It may also be difficult to enforce in U.S. courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and Inter & Co officers and directors who are not resident in the United States and the substantial majority of whose assets are located outside of the United States.

Further, it is unclear if original actions predicated on civil liabilities based solely upon U.S. federal securities laws are enforceable in courts outside the United States, including in the Cayman Islands and Brazil. Courts of the Cayman Islands may not, in an original action in the Cayman Islands, recognize or enforce judgments of U.S. courts predicated upon the civil liability provisions of the securities laws of the United States or any state of the United States on the grounds that such provisions are penal in nature. Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, courts of the Cayman Islands will recognize and enforce a foreign judgment of a court of competent jurisdiction if such judgment is final, for a liquidated sum, provided it is not in respect of taxes or a fine or penalty, is not inconsistent with a Cayman Islands’ judgment in respect of the same matters, and was not obtained in a manner which is contrary to the public policy of the Cayman Islands. In addition, a Cayman Islands court may stay proceedings if concurrent proceedings are being brought elsewhere.

Judgments of Brazilian courts to enforce our obligations with respect to Inter & Co Class A common shares may be payable only in Reais.

Most of our assets are located in Brazil. If proceedings are brought in the courts of Brazil seeking to enforce our obligations in respect of Inter & Co Class A common shares, we may not be required to discharge our obligations in a currency other than the real. Under Brazilian exchange control laws, an obligation in Brazil to pay amounts denominated in a currency other than the real may only be satisfied in Brazilian currency at the exchange rate, typically as determined by the Central Bank, in effect on the date the judgment is obtained, and such amounts are then typically adjusted to reflect exchange rate variations and monetary restatements through the effective payment date. The then-prevailing exchange rate may not afford non-Brazilian investors with full compensation for any claim arising out of or related to our obligations under the Class A common shares.

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There could be adverse U.S. tax consequences to U.S. persons that hold the Class A common shares if we are treated as a passive foreign investment company.

U.S. shareholders of passive foreign investment companies are subject to potentially adverse U.S. federal income tax consequences. In general, a non-U.S. corporation is a passive foreign investment company, or PFIC, for any taxable year in which (i) 75% or more of its gross income consists of passive income; or (ii) 50% or more of the average value of its assets (generally determined on the basis of a quarterly average) consists of assets that produce, or are held for the production of, passive income. For purposes of the above calculations, a non-U.S. corporation that owns, directly or indirectly, at least 25% by value of the shares of another corporation is treated as if it held its proportionate share of the assets of the other corporation and received directly its proportionate share of the income of the other corporation.

Based on our Audited Financial Statements and our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not believe that we were treated as a PFIC for the 2021 taxable year and we do not anticipate becoming a PFIC for our current taxable year or in the reasonably foreseeable future.

However, the determination whether we are a PFIC must be made annually after the close of each taxable year and based on the facts and circumstances at that time, such as the valuation of our assets, including goodwill and other intangible assets, which may depend on the value of the Class A common shares and the BDRs which can be expected to vary from time to time. The determination of our PFIC status also depends on whether and how fast we deploy significant amounts of cash and other liquid assets. In addition, although we consider ourselves to be actively engaged in an active business, certain of our income may be treated as passive income, unless it is eligible for an exception for certain income derived in the active conduct of a banking business, or the “Active Banking Exception,” and related assets may be considered passive assets unless the Active Banking Exception applies. We believe that the Active Banking Exception, as interpreted by Treasury regulations, including recently proposed Treasury regulations, or the Proposed Regulations, should apply to treat such income and related assets as active, but such treatment is not certain. Moreover, while the Proposed Regulations permit taxpayers to rely on them, it is possible that the U.S. Department of the Treasury, or Treasury Department, will not follow the approach of the Proposed Regulations when issuing final regulations, in which case the Active Banking Exception might not apply to our income and it is possible that we could be treated as a PFIC. Accordingly, there can be no assurance that we will not be treated as a PFIC for a given taxable year. If we are a PFIC, U.S. shareholders would be subject to certain adverse U.S. federal income tax consequences as discussed under “Taxation—United States Federal Income Tax Considerations.”

If we are required to register under the Investment Company Act, our ability to conduct our business could be materially adversely affected, and you could suffer losses.

Inter & Co is not registered, and does not intend to register, as an investment company under the Investment Company Act of 1940, as amended, or the Investment Company Act. The Investment Company Act contains substantive legal requirements that regulate the manner in which investment companies are permitted to conduct their business activities. Inter & Co’s assets are primarily its indirect equity stake in Banco Inter, which we believe is not an investment company pursuant to the exemption set forth in Rule 3a-6 under the Investment Company Act (which covers foreign banks).

We expect that Inter & Co’s operations will be conducted through wholly or majority-owned operating subsidiaries so that Inter & Co and each of its subsidiaries is not an investment company under the Investment Company Act. As a consequence of seeking to avoid the need to register under the Investment Company Act on an ongoing basis, we may be restricted from holding certain securities or may structure operations in a manner that would be less advantageous than would be the case in the absence of such requirements.

Additionally, if we were to be deemed an investment company, restrictions imposed by the Investment Company Act, including limitations on our capital structure and our ability to transact with our affiliates, could make it impractical for us to continue our business as currently conducted and could have a material adverse effect on our financial performance and operations.

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Pursuant to Brazilian law, we may amend our deposit agreement in respect of the BDRs and the rights of BDR holders by means of an agreement with the BDR Depositary and without the consent of BDR holders.

Pursuant to Brazilian law, we may amend the BDR deposit agreement and the rights of Inter & Co BDRs by means of an agreement with the BDR Depositary and without the consent of BDR holders. In that case, even if the amendment or change is materially adverse to the rights of BDR holders, it will become effective and the BDR holders will not be able to challenge such amendment.

There are no specific rules relating to the delisting of our BDRs from the B3.

We may decide to delist the Inter & Co BDRs from B3. In such case, we cannot guarantee that we (or any person related to us) will make a public offering for the acquisition of Inter & Co BDRs or the underlying Class A common shares on terms and conditions that meet the expectations of the BDR holders, who in any case will not be able to prevent us from deregistering from the CVM and delisting our BDRs from the B3.

Certain Risks Related to Our Business

The coronavirus pandemic (COVID-19), as well its economic effects, together with slowdown and volatility in the Brazilian and global financial and capital markets have had and may continue to have adverse effects on our business, financial condition, liquidity and operating results, and may increase other risks described in this section “Risk Factors.”

The COVID-19 pandemic has increased the volatility in the Brazilian and international financial markets and in economic indicators, including inflation, interest rates, foreign exchange rates and credit spreads. As an example, as a result of greater volatility, B3 circuit breaker was triggered several times in March 2020 and the value of assets was negatively impacted on those occasions. Any unexpected shocks or movements in these market factors or conditions may result in financial losses associated with our positions and exposures, which may deteriorate our financial condition. Government and anti-COVID-19 pandemic measures have had and are likely to continue to have a strong impact on global and Brazilian macroeconomic and financial conditions, including disruption of supply chains and the closure of various companies, leading to loss of revenue, increased unemployment, stagnation and economic contraction. Measures taken by government authorities worldwide, including Brazil, in order to stabilize markets and support economic growth may not be sufficient to control high volatility or prevent serious and prolonged reductions in economic activities.

In addition, the social distancing measures imposed by government authorities to contain the COVID-19 pandemic from time to time have resulted in a sharp drop or even a halt in the activities of companies in various sectors. Such policies and measures influenced the behavior of consumers and the population in general, the demand for services, products and credit. Current macroeconomic fundamentals, such as unemployment, inflation and growth have had and can continue to have a negative impact on our business, mainly in the form of:

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Consumers affected by the COVID-19 pandemic may continue to exhibit downturns in behavior even after the crisis ends, maintaining low levels of discretionary spending over the long term. Our market, liquidity, credit and operational risk management policies, procedures and methods may not be fully effective.

In March 2021, the number of registered cases continued to increase and the occupancy rate of hospital beds remained high in Brazil. As vaccination campaigns further progress, restrictions on commercial activities and social distancing rules could be reviewed by the authorities. Moreover, the immunization of the Brazilian population is not complete. As of December 2021, approximately 65% of the population had received both vaccine shots, with the percentage of those who had received the vaccine booster at around 10%. Uncertainties about the effectiveness of vaccines and the fact that they could fuel the emergence of viral variants and mutations, resulting in an insufficient immunization, could make it difficult to control the pandemic.

The extent of the COVID-19 pandemic will have more significant impact on our business, financial condition, liquidity and results will depend on various market and political factors beyond our control, including the possibility of additional outbreaks with new variants that may be more or less aggressive and/or contagious and the intensity of the economic downturn resulting from actions taken, or to be taken, by government authorities.

The neobank or digital banking sector in Brazil is in its early years and is highly competitive, and we may be unable to maintain our market position.

The Brazilian digital banking or neobank sector is in its early years and is highly competitive. As such, large financial institutions, considered to be “incumbents,” have adopted strategies that focus on digital banking and therefore compete with newcomers in:

Many of our competitors, in particular traditional banks or competitors that are affiliated with traditional banks, have substantially greater financial, operational and marketing resources than we do. Accordingly, these competitors may be able to offer more extensive or enhanced products and services to customers, or offer such products and services at more attractive rates (including more attractive interest rates on deposits and loans) or on better terms. As a result, we may be forced to increase our deposit interest rates, or lower the rates we charge for loans or the fees we charge for other services or devote significant financial resources to our marketing efforts or developing customized products and services that customers demand, in order to maintain and expand our market share. If this were to occur, we would need to enhance cost control to maintain our margins, and, if we are unable to control our costs, our margins may be adversely affected.

In addition, other financial institutions (including fintechs with digital credit platforms), have begun to actively operate in the digital banking segment in Brazil, further increasing competition. The fintech business model differentiates itself by the use of technology to reduce the bureaucracy related to financial services and products, focusing on efficiency and productivity to reduce costs and processes when compared to traditional financial institutions. Such business models oftentimes are also subject to lighter regulatory requirements. These advantages, which are created by the fintech ecosystem itself, pose challenges to the traditional banking business model, requiring constant adaptation to the industry’s innovations and thus allowing new players to enter the industry rapidly and in such a way that cannot be anticipated or immediately copied by its competitors.

In addition, some of our competitors in certain product areas and markets may not be subject to the same regulatory requirements that we are. For instance, certain fintechs in Brazil operate under licenses that provide lighter regulatory requirements when compared with our multi-service bank (banco múltiplo) license, such as sociedades de crédito direto and payment institutions. Regarding the latter, certain payment institutions are permitted to operate in Brazil without Central Bank authorization or compliance with the regulatory framework and the higher costs associated therewith until a certain threshold of transactions is met. As a result, such competitors are able to offer products and services at lower costs, which puts pressure on the pricing and terms that we offer our products and services and, as a result, on our profit margins.

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If we fail to provide new and innovative products and services, we may not be able to implement our growth strategy and our results and financial position may be adversely impacted.

To be competitive and maintain and enhance customer experience and the quality of our products and services, we must continuously invest in the development of new products and features to keep pace with technological developments. Rapid, significant and disruptive technological changes have impacted or may in the future impact on the industries in which we operate, including changes in artificial intelligence and machine learning (e.g., in relation to fraud and risk assessment); payment technologies (e.g., real-time payments, payment card tokenization, virtual and crypto currencies, including distributed ledger and blockchain technologies, and proximity payment technology, such as near-field communication and other contactless payments); mobile and internet technologies (e.g., mobile application technology); merchant technologies, including for use in-store, online and via mobile, virtual, augmented or social-media channels; and digital banking features (e.g., balance and fraud monitoring and notifications).

Many of our competitors, especially large incumbent financial institutions and competitors affiliated with such institutions, have the ability to devote more financial and operational resources than we can to the development of new technologies and services and, if successful, their development efforts could render our services less desirable to customers, resulting in the loss of customers or a reduction in the fees we can generate. If our development efforts prove unsuccessful, or if we are unable to develop, adapt to or access technological changes on a timely and cost-effective basis, our business, financial condition and results of operations could be materially adversely affected.

Failures or breaches in critical processes or systems may interrupt our business, increasing costs and resulting in losses, which could materially adversely affect us.

As a financial institution, we are exposed to various operational risks, including risks of interruption of our business, failure of our systems or operations and fraud by our employees or third parties, such as failures to properly record transactions, equipment failures or mechanical or employee errors. There can be no assurance that our systems or processes will not fail or that fraud, errors, or operating problems will not materially adversely affect us.

Moreover, we may be subject to significant operational process interruptions, including events that are entirely or to some measure beyond our control, which may materially adversely affect our operations, including but not limited to:

Operational failures, including those resulting from human error or fraud, increase costs, and may result in losses, disputes with customers, damage to our image, lawsuits, regulatory fines, sanctions, intervention, the obligation to issue refunds or other damages. These impacts may also be long lasting and have irreversible impacts to the long term prospects of the business. Any such operational failure may materially adversely affect us.

Failure to protect against risks related to cybersecurity may result in a loss of revenue and materially adversely affect us, including hampering our operations or resulting in unauthorized disclosure of information.

Our security structure is subject to cybersecurity failures, including cyber-attacks, which may include intrusion into platforms and IT systems (which includes, inter alia, servers, databases, networks, applications, software, services, partners’ services and anything considered a digital asset (e.g. which has bits and bytes)) by malicious third parties, malware infiltration (such as computer viruses), contamination (whether intentional or accidental) of networks and systems by third parties with whom we exchange data, cyber-attacks designed to access, change, corrupt or destroy systems, computer networks, stored information or transmitted information, as well as unauthorized access to or breach of sensitive and or private data of customers by our employees, third parties or others. For example, in 2018, certain information relating to our customers in the year was published without our authorization. The

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unauthorized publication of this information resulted in certain legal proceedings against us. For additional information, see “Item 4. Information on the Company — B. Business Overview — Legal and Administrative Proceedings.”

Successful cyber-attacks may paralyze or make our services or systems unavailable for uncertain periods of time, resulting in losses, contamination, corruption or loss of customer data and other sensitive stored information, a breach of secured data, dissemination of unauthorized information or loss of significant levels of liquid assets (including cash).

Additionally, due to the remote working strategy we adopted during the pandemic, there is the possibility of an increase in cyber-attack attempts through employees’ computers because the cyber security of networks used by employees outside our offices may not provide the same level of security as that of our work environment, which may impair our ability to manage our business.

As cyber-attacks continue to evolve in size and sophistication, we may incur significant costs in attempting to modify or improve protective measures. Moreover, cyber-attacks are constantly changing and being reinvented. We may not be able to upgrade our systems quickly enough to keep up with these changes, or we may be required to allocate additional funds above the amounts originally earmarked to stop such attacks. We may be exposed to the risk of being held jointly and severally liable for possible claims by these third parties.

We may also incur significant costs in investigating or remedying any vulnerabilities or breaches or in reporting cyber-attacks to our customers. Any inability to effectively protect our systems and platforms against cyber-attacks may result in losses, disputes with customers, damage to our reputation, lawsuits, regulatory fines, sanctions, regulatory intervention and other damages, each of which could materially adversely affect us. We may not be able to upgrade our systems at a sufficient pace to keep up with these changes, or we may be required to allocate additional funds above the amounts originally allocated to prevent such attacks.

Our regulators are increasingly aware of the need for cyber risk management and, among the current regulations, we are subject to CMN Resolution 4,893/21, whose requirements are related to the readiness to report attacks in response to cyber incidents and the adequacy of our controls environment and information security policies. Failure to manage cybernetic risks or to comply with these regulatory requirements may adversely affect us in relation to the regulator.

We have strategic partners in infrastructure and systems, which also process information and operate critical services. These suppliers are subject to risks similar to those described above and may have a direct impact on us and our customers. Additionally, under Brazil’s data protection law, data processors may be jointly and severally liable for any damage caused to the data subjects. As such, we may be jointly and severally liable for any damage caused by third-party service providers involved directly in our data-processing operations. Any undue use of customer information, or the perception of such misuse, may subject us to legal and administrative proceedings and fines, which may adversely affect our reputation and financial condition.

We are subject to risks associated with noncompliance with data protection laws and may be materially adversely affected in the event we are subject to fines and other sanctions under these laws.

In 2018, the Data Protection Law (Lei Geral da Proteção de Dados), Law No. 13,709, of August 14, 2018, or Data Protection Law, was approved and has been in force since September, 2020, transforming the manner in which personal data protection in Brazil is regulated. The Data Protection Law is a new legal milestone regulating the processing of personal data, establishing the rights of the data subjects, the applicable legal basis for the protection of personal data, the requirements for obtaining consent, as well as obligations and requirements following the occurrence of security incidents and data leaks. In addition, Law No. 13,853 of July 9, 2019, amended the LGPD to create the Brazilian National Authority for the Protection of Data (Autoridade Nacional de Proteção de Dados), or ANPD.

The process of remaining compliant with the data protection statutes and regulation in Brazil requires us to continuously improve our practices, which may require additional investments and additional cybersecurity expenses, both of which may adversely affect our financial condition and results of operations.

Failure to comply with any of the provisions of the Data Protection Law may subject us to: (i) legal proceedings (including class actions and claims from individuals and legal entities) seeking indemnification for a breach of the Data Protection Law or other similar statutes regulating data privacy; and (ii) the penalties provided for in the Data Protection Law and other similar statutes regulating data privacy to be imposed by certain consumer protection entities (which have been imposing such fines since before the Data Protection Law).

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In the event that we fail to comply with the Data Protection Law, we may be subject to fines (on an individual or cumulative basis), warnings, disclosure obligations, temporary suspensions, an obligation to delete personal data and a fine of up to 2.0% of our Company’s, economic group’s or conglomerate’s revenue (excluding taxes) in Brazil in the year proceeding the breach up to an aggregate R$50.0 million per infraction. In addition, we may be held liable for civil, moral, individual or collective damages caused by us or our subsidiaries in the event of a failure to comply with the Data Protection Law.

Accordingly, any failure to protect personal data processed by us or our subsidiaries to comply with applicable data protection laws, may result in significant fines, an obligation to disclose the incident to the market, an obligation to delete personal data from our records or suspension of our operations and may materially adversely affect our reputation and results of operations.

Further, CMN Resolution No. 4,893, of February 26, 2021, or “CMN Resolution 4,893” sets forth requirements for data processing, storage and cloud computing services by financial institutions and determine the mandatory implementation of a cybersecurity policy. Financial institutions, including Banco Inter, are required to draw up internal cybersecurity policies, to appoint an officer to be responsible for implementing and overseeing cybersecurity policies, to adopt procedures and controls to prevent and respond to cybersecurity incidents and to include specific mandatory clauses in agreements regarding data processing, storage and cloud computing services. As a consequence of Supplementary Law No. 105, of January 10, 2001, we are also subject to strict secrecy rules on transactions, and are required to preserve the confidential nature of assets and liabilities transactions and of the services provided to our customers. Any additional privacy laws or regulations enacted or approved in Brazil could harm our business, financial condition or results of operations.

Interruptions or failures in our technology systems or any lack of integration or redundancy of these systems may materially adversely affect us.

Our operations depend on the efficient and uninterrupted operation of our IT systems. For example, these systems are required to process a significant and constantly growing number of transactions efficiently and accurately, as well as enable the processing, storage and secure transfer of confidential data and other sensitive information. The software that we use to process these transactions is required to interact with third party software or operating systems. Accordingly, any incompatibilities or the unavailability of such software or operating systems, or any errors or limitations as to their use, may prevent proper processing of transactions made by our customers resulting in losses, disputes with customers, lawsuits, regulatory fines, sanctions, regulatory intervention, an obligation to issue refunds or other damages, each of which could materially adversely affect us.

In addition, the hardware and software that we use may be damaged or be subject to complete or partial interruptions as a result of internal failure, natural disasters, failures in telecommunications services, computer viruses, physical intrusion, electronic intrusion and other events or similar occurrences. Any of these events may result in disruptions, delays and/or losses in the transmission of essential data, which may materially adversely affect us. System failures, bugs and version updates may also cause adverse effects, including service interruptions, data losses, data breaches and/or vulnerabilities.

Any failure in monitoring or improving our IT systems linked to our operation (including due to insufficient investments) could adversely affect our operations.

Any failure to improve our operational IT systems or to make the necessary investments to keep pace with technological developments in the banking and financial industry may materially adversely affect us.

Considering that our core business is intrinsically linked to the digital environment in which new technologies are developed daily, our ability to maintain our competitiveness and expand our business depends on our ability to improve IT systems and efficiently increase our operational capacity. As a result, we must continuously make investments in significant improvements in our IT infrastructure in order to remain competitive. There can be no assurance that we will have the funds available to maintain the levels of investment required to support improvements or upgrades to our IT infrastructure, which may result in a significant loss of competitiveness against our main competitors, and an inability to keep pace with the evolution of the sector and customer needs, materially adversely affecting us.

Moreover, we are unable to foresee the effect of technological changes on our operations. In addition to our own initiatives, we depend in part on third parties for the development of, and access to, new technologies. New services and technologies applicable to our industry may arise and make the current technology used in our products and services obsolete. The development of new technologies and their integration into our products and services may require significant investment and considerable time and may

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ultimately prove unsuccessful. In addition, our ability to adopt new products and services and to develop new technologies may be limited by industry standards, changes in rules and regulations, customer resistance, intellectual property rights held by third parties and other factors. Our success will depend on our ability to develop and incorporate new technologies to meet the challenges of a rapidly evolving market for financial services that are provided electronic means and to adapt to changing technologies. If we are unable to do so in a timely or profitable manner, our business and results of operations may be materially adversely affected. We have systems, programs and routines that were and are coded by Inter employees and third-party professionals. We cannot guarantee that these codes do not have unmapped failures or breaches.

Models, policies, procedures and methodologies that we have adopted to manage risks (including market, liquidity, credit, operational and environmental risks) may not be sufficient to prevent exposure to unforeseen or unknown risks that may materially adversely affect us.

The models, policies, procedures and methodologies that we use to monitor, measure and manage risks may not be sufficient to prevent our exposure to unforeseen risks or the occurrence of known risks, which may materially adversely affect us. Moreover, potential measures or changes instituted by regulators, including changes in laws, may materially adversely affect us.

For example, statistical models and management tools used to estimate our exposure within a given time period may prove inaccurate in estimating the capital, controls or safeguards required to cover, control or mitigate unpredictable, unforeseen or erroneously quantified factors. Furthermore, stress tests and sensitivity analyses based on predefined scenarios may not identify all of the possible impacts on our results of operations.

We may incur losses resulting from failures, inadequacies or deficiencies in internal processes, systems, or human error. In addition, we may incur losses resulting from external events such as natural disasters, terrorism, theft and vandalism, as well as events that are not properly identified and addressed by our models. The incurrence of any of these risks may materially adversely affect us. See “—We have identified material weaknesses in our internal control over financial reporting. If we are unable to remedy these material weaknesses or fail to establish and maintain a proper and effective system of disclosure controls and internal controls over financial reporting, our ability to produce timely and accurate financial statements, our results of operations and our ability to operate our business or comply with applicable regulations may be adversely affected.”

Our systems, methods, analysis, management and risk controls relating to our customer base may not be sufficient to prevent losses.

Part of our credit portfolio is composed of treasury and loan transactions, and as a result, fluctuations in interest rates, the prices of securities, exchange rates and other floating market indices may materially adversely affect our results of operations. The success of these banking transactions depends, among other factors, on the balance between the risks assumed and the returns obtained from these transactions.

Before performing any of these banking transactions, we carry out an analysis of the credit profile of each of our customers in order to evaluate the risk that each transaction poses. There can be no assurance that our risk management and credit analysis systems, methods or policies and control systems will be sufficient to prevent losses due to some failure to identify all applicable risks. There can also be no assurance that our risk management systems will be sufficient to prevent losses stemming from analysis of the risks identified, or that our risk identification will be adequate, correct or timely, which may materially adversely affect us.

We are subject to laws and regulations relating to money laundering, financing of terrorism, corruption and other illegal activities in the jurisdictions in which we operate and may be materially adversely affected by violations of these laws and regulations.

We are subject to laws and regulations related to the prevention and combating of money laundering, financing of terrorism, corruption and other illegal activities. These laws and regulations require, among other measures, that we adopt and apply “Know-your-Client,” “Know-your-Supplier,” “Know-your-Partner” and “Know-your-Employee” procedures (including in all cases, politically exposed person, or PEP assessments) and also suitable internal policies to address our business risks. We must also provide training for employees in the prevention of money laundering, financing of terrorism and other related illegal activities, as well as report suspicious transactions to the appropriate authorities.

These standards have become more detailed and complex, requiring that we continuously improve already sophisticated systems and use specialized personnel for compliance and monitoring purposes. Policies and procedures to detect and prevent the use of our framework for money laundering, financing of terrorism, corruption and related unlawful activities, as well as those designed to

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prevent bribery and other illegal practices may not prove effective in preventing the unauthorized use of our systems by our directors, officers, staff members, controlling shareholder, affiliates or third-party agents for illegal or improper activities.

In January 2022, we completed the acquisition of 100% of the share capital of USEND, which is engaged in money transmittal business in the United States. Money transmittal businesses are particularly exposed to money laundering risks, particularly in connection with international transfers involving low amounts, which may not be captured by monitoring procedures.

In the event that we are unable to fully comply with applicable laws and regulations to prevent and combat money laundering and the financing of terrorism, combating corruption or other related illegal activities, we may be subject to:

Any such consequences may materially adversely affect our reputation, financial condition and results of operations.

We may be materially adversely affected to the extent we, our controlling shareholder, affiliates, directors, officers, staff members or third-party agents are involved, or accused of being associated with, money laundering, financing of terrorism, corruption or other related illegal activities, or in the event that our operations, accounts or systems are used, with or without our knowledge, to further money laundering, financing of terrorism, corruption or other illegal or improper purposes. Under Brazilian anti-corruption laws, an entity may be punished in case of breaches by other entities of its group.

We may be materially adversely affected by damage to our reputation.

We depend on our image and credibility in the market to operate our business and attract and retain customers, investors and employees. Various factors may damage our reputation and result in a negative perception by our customers, counterparties, shareholders, investors, government agencies, the community and regulators. These factors include, among others, non-compliance with legal obligations, conducting unlawful transactions with customers, contracting suppliers that do not conduct their business ethically, unauthorized disclosure of customer information, misconduct by our employees and failures in risk management. In addition, negative publicity relating to us may damage our business, while actions taken by third parties, including suppliers, such as engaging in child labor, slave labor, discriminatory practices, unlawful acts and corruption, activities contrary to health, work safety or environmental regulations, may indirectly tarnish our reputation in the market. Any failure to establish or preserve a favorable reputation among customers and within the banking industry may materially adversely affect us.

We may have insufficient capital to meet the capital requirements established by the CMN and the Central Bank.

Brazilian financial institutions must comply with the guidelines imposed by the CMN and the Central Bank which are similar to the guidelines of Basel II, related to capital adequacy, including minimum capital requirements. We cannot guarantee that in the future we will have sufficient funds or resources available to ensure adequate capitalization, and therefore we may be unable to meet the capital adequacy requirements imposed by the CMN and the Central Bank.

CMN Resolution No. 4,955, of October 21, 2021, or CMN Resolution No. 4,955, establishes a calculation method for regulatory capital held by financial institutions and other institutions authorized to operate by the Central Bank.

This resolution establishes the beginning of the transition to new standards established by Basel III, and its main purposes are:

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Moreover, financial institutions (such as Banco Inter) may only distribute profits in an amount higher than that which may be required by law or regulations if this distribution does not jeopardize compliance with capital and equity requirements. Accordingly, any failure of Banco Inter to meet minimum capital requirements may negatively affect our ability to distribute dividends and interest on capital to shareholders, in addition to adversely affecting our operating and lending capacity. As a result, we may have to sell assets or take other measures that may materially adversely affect us.

In addition, Brazilian regulators may apply sanctions due to capital inadequacy, including administrative proceedings, fines, disqualification of management and even the cancellation of our operating license, which may materially adversely affect us.

Mismatches between interest rates, indexes, exchange rates, the maturities of our credit portfolio and our sources of funds may negatively affect our credit transactions and us.

We are exposed to mismatches of interest rates and maturities between our assets and liabilities. A portion of our credit portfolio is composed of loans at fixed or floating interest rates and the profitability of credit transactions depends on our capacity obtain funding at competitive rates. An increase in market interest rates in Brazil could increase our cost of funding, particularly the cost of term deposits, thus reducing the spread earned on our credit portfolio, materially adversely affecting us.

Any mismatch between the maturity of credit transactions and sources of funds, which in general are for shorter terms, may exacerbate the effect of any imbalance in interest rates, and pose a liquidity risk in the event that we do not have adequate funding. An increase in the total cost of funding may result in an increase in interest rates that we charge on lending, which may consequently affect our ability to attract new customers and reduce our net interest margin, or NIM. A decrease in the growth of our credit portfolio, or illiquidity arising from the lack of permanent funding, may materially adversely affect us.

See “Presentation of Financial and Other Information—Special Note Regarding Non-GAAP financial measures” and “Item 11. Quantitative and Qualitative Disclosure about Market Risk.”

The growth of our credit portfolio, including credit card portfolio, may result in an increase in delinquency.

Our management has adopted a strategy of expanding our credit portfolio increasing origination and approving new loans, in particular non-collateralized loans (on which defaults are more likely). This strategy may result in an increase in our financial leverage and, potentially, lead to an increase in default risk and impairment losses on financial assets, which may materially adversely affect us.

Modifications to the rules and regulations governing the origination of real estate loans by financial institutions in Brazil may materially adversely affect us.

The origination of real estate loans by financial institutions in Brazil is subject to rules and regulations that may adversely affect the volume and terms of real estate loans in the Brazilian market. From time to time, the Brazilian government modifies these rules, including for the purpose of advancing public housing policy. There can be no assurance that modifications to rules and regulations governing the origination of real estate loans will not be enacted or that, if enacted, such rules and regulations will be favorable. We derive a significant portion of our operating income from our real estate lending operations. As a result, the suspension of, or significant modifications to, the rules and regulations governing the origination of real estate loans may affect our real estate lending, and as a result, may materially adversely affect us.

Our ability to collect payments due from payroll deductible loans, or payroll loans, is subject to laws and regulations, judicial interpretations and policies of public entities related to payroll deductions.

A portion of our income is derived from payroll loans, where our customers’ loan payments are deducted directly from their pensions, annuities or other earnings. Our ability to make payroll deductions is governed by various federal, state and local laws and/or regulations that establish limits on such deductions, and requires certain licenses issued by public entities and agreements

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with private sector employers. Any changes in the applicable regulations or adverse judicial determinations may require adjustments to our operational procedures used to collect payroll installments, as well as the granting of payroll loans.

Our capacity to receive payments due on personal loans paid directly from payroll or from social security benefits also depends on the effectiveness and validity of the agreements we entered into with entities of the public sector, including the Brazilian Institute of Social Security (Instituto Nacional da Seguridade Social - INSS) and employers of the public and/or private sector, as well as on the continued employment or status as beneficiary of the borrowers.

Part of our loans are derived from lending through loans deducted directly from payroll, including the payroll card model, a credit card for which monthly bills are deducted from payroll. Repayments are deducted directly from the borrowers’ pensions, annuities or salaries, and may be interrupted if the borrower (a retired person, pensioner, employee or official of the private or public sector) loses his or her job, if other deductions, such as alimony, take priority over the loan, or if the borrower dies.

In the event of a borrower’s termination or leave of absence from his or her employer, the payment of the loan may depend exclusively on the borrower’s financial capacity. There can be no assurance that we will be able to recover loan amounts in these circumstances.

Rules and regulations governing payroll loans establish a maximum percentage of income that may be deducted by financial institutions for payment of debts resulting from payroll loans. If a borrower divorces or legally separates from his or her spouse, under Brazilian law, the alimony due by the borrower may be deducted directly from payroll under certain circumstances and have priority over other debts, such as our payroll loans, which, as a result, might not be repaid.

Our payroll loans are also subject to risks relating to the employer or payee. Any events that affect payments to employees, such as an employer’s financial condition, failures or changes in the internal controls, may delay, reduce or prevent deductions from the employees’ earnings, and therefore, result in losses on our payroll loans portfolio, which may materially adversely affect us.

Any of these risks may result in increased portfolio defaults, provisions for expenses and other expenditures related to collection of amounts due, which may materially adversely affect us.

Executive Order No. 936/2020, which was converted into Law No. 14,020, of June 6, 2020, established the Emergency Program for the Maintenance of Employment and Income, applied during the state of public calamity recognized by Legislative Decree No. 6, of March 20, 2020, which includes the possibility of proportional reductions in working hours and wages, as well as temporary suspension of the employment contract. Due to the extended duration of the COVID-19 pandemic in Brazil, Executive Order No. 1,045, of April 27, 2021, re-implemented the aforementioned program for an additional 120 days. In this scenario, a percentage of our payroll loan agreements may be affected because the borrower’s income or salary that may be used to make payments on payroll loans, or consignable income, may be decreased in relation to the income or salary that was consigned to us, requiring us to refinance or otherwise extend the term of the agreements and consequently our receipt of these amounts.

We may sustain substantial losses as a result of our securities and derivatives transactions.

We trade securities and acquire debt and equity securities. These investments may result in substantial losses in the future given that securities are subject to significant price variations.

We also trade derivatives. These transactions are subject to market, credit and operating risks, including credit or default risk and basis risk (risk of loss associated with the variation of the difference between the asset’s return and our funding cost/hedging cost) and default risk from our counterparties.

Derivatives transactions may cause significant volatility in our equity or lead to results of operations that are better than those that we would have achieved had we not entered into these transactions. There can be no assurance that our securities and derivatives transactions will not materially adversely affect us.

The uncertainties caused by the COVID-19 pandemic has had an adverse impact on the global economy and capital markets, including in Brazil, causing eight circuit-breakers that stopped B3’s trading during the month of March 2020. The price of most of the assets traded in B3 was and has been adversely affected for a number of reasons, including due to the COVID-19 pandemic.

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Impacts similar to those described above may occur again, causing the assets traded on B3 to fluctuate, including securities held by us.

We may be materially adversely affected if key members of our management resign, or if we are unable to attract and retain specialized management and skilled employees.

Our ability to remain competitive and reach our growth target is dependent upon the success of our management and we may be unable able to successfully attract and retain specialized management. We may be materially adversely affected in the event that our key management personnel resign or if we are unable to continue to attract and retain specialized management.

Also, our business involves specialized functions and requires skilled personnel, with wide-ranging skillsets, experience and talent. We may face a market shortage of personnel and labor cost increases, and to maintain and grow our business, we will need to attract and retain highly skilled employees. We currently face and expect to continue facing in the future intense competition for talent. There is a limited pool of professionals who have the skills and training needed to help us grow, and we compete for such talented professionals not only with other companies in the Brazilian financial industry but also internationally, particularly given the flexibility for remote working since the beginning of the COVID-19 pandemic. If we lose key members of our management or key employees, we may not be able to locate a suitable or qualified replacement, and we may incur additional expenses to recruit and train a replacement, which could severely disrupt our business and growth.

We may be unable to fully implement our management strategies, which may materially adversely affect us.

We intend to expand our share of the Brazilian domestic financial market, particularly by expanding our participation in the retail segment (including personal loans) and by diversifying and expending our portfolio of products and services. Our actual productivity, investments, operating costs and business strategies may be substantially less favorable than originally projected. Difficulties may arise particularly in the form of financial, demographic, competition-related and/or technology issues, among others. There can be no assurance that we will be successful in implementing our management strategies, or that our concentration of activities in specific segments will not materially adversely affect us.

We may experience difficulty in foreclosing upon collateral for unpaid loans and financing.

When borrowers default on loan and financing agreements, we take in-court or out-of-court measures to collect the amounts due. There can be no assurance that our collection and foreclosure procedures in connection with these loans or financing activities will be the most appropriate or that they will result in the actual recovery of the amounts due. We may be materially adversely affected as a result of an increase in loss resulting from defaults.

We may not be able to recover amounts resulting from defaulted loans by borrowers or seize assets pledged as collateral under these agreements, and such collateral, when seized, may not be sufficient to cover defaulted loan balances. We may experience difficulty in foreclosing on collateral for unpaid loans and financing given that foreclosure depends on external variables, such as developments in out-of-court and in-court collection proceedings, and most of these proceedings are challenged in court by the debtors to postpone recovery. We may not be able to recover our delinquent credits on favorable conditions, which may materially adversely affect us, including as a result of increases in our provision for impairment losses.

Where the debtor is in bankruptcy or in-court or out-of-court reorganization, we compete with other preferred and priority creditors to enforce our guarantees. Judicial proceedings may lead to renegotiation of the borrower’s debts.

Certain global events that impact the Brazilian or global economy, such as the COVID-19 pandemic and the war in Eastern Europe, may significantly increase the risks associated with the debt market, including those resulting from increased default, renegotiations of existing debt contracts and possible claims of force majeure, may increase our loss provisions, as well as actual losses, causing loan losses to exceed the provisioned amounts, and impact on the proportion of loans in arrears in relation to total loans granted by us, materially and adversely affecting our financial results.

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Upon borrower default, we may be unable to obtain marketable title to properties secured through fiduciary assignment (or mortgage), which may materially adversely affect us.

Due to the increase of our portfolio, the volume of foreclosures as a result of customer defaults may increase significantly, which would indicate an increased risk of our credit portfolio. All of our real estate loans are guaranteed by fiduciary assignments of property or mortgages. In the event the borrower defaults, and following the termination of any applicable cure period established in the loan agreement, we may seek to enforce the fiduciary assignment and transfer title to the property to our name for subsequent auction sale.

We are not subject to a deadline to foreclose on property and the timing of any such foreclosure may vary depending on the circumstances of out-of-court proceedings, such as notary requirements, difficulty in locating the debtor, the requirement to publish notices calling on the debtor to settle the debt and judicial measures available to the debtor, among other circumstances. In addition to the possibility of delays in the proceedings, there is also the possibility of challenges by the debtor, which may give rise to judicial decisions invalidating recovery or annulling the transfer of title, property auction or payment of auction proceeds, which may materially adversely affect us. Because of depreciation and other maintenance costs impacting on the collateral, we seek to sell assets not for own use within a short period of time. We may be unable, however, to sell our properties on acceptable terms and conditions, which may materially adversely affect us.

In addition, particularly with respect to the collateral, there can be no assurance that the amounts we recover through auctions for the sale of repossessed property will be sufficient to cover customer balances outstanding. In the event that we are not able to collect a debt or seize the collateral, or if we are unsuccessful in auctioning repossessed property, we may be materially adversely affected.

Adverse decisions in legal and administrative proceedings and investigations to which we, our subsidiaries or our directors and officers are a party may materially adversely affect us.

We, our subsidiaries and members of our management may be party to lawsuits and administrative proceedings related to civil (including, in particular, claims under Brazilian consumer laws), tax, labor, antitrust, and regulatory claims and investigations arising in the ordinary course of business. Certain of these lawsuits and proceedings may involve sizeable damages claims. For more information on our current legal and administrative proceedings, see “Item 4. Information on the Company — B. Business Overview — Legal and Administrative Proceedings.”

We cannot assure that the outcomes of these lawsuits will be favorable or that we have sufficiently anticipated the risks inherent to each claim. Provisions that we have recognized, or may recognize in the future, may be insufficient to cover the total cost of these lawsuits and proceedings. In addition, there can be no assurance that material legal, arbitral and administrative proceedings will not arise in the future in relation to contingencies that oblige us to expend significant resources.

In addition, under Brazilian law, a broad range of forms of conduct involving environmental, labor or tax laws may be considered criminal offenses. Accordingly, we, our subsidiaries and members of our management could be subject to criminal investigations and criminal proceedings in connection with allegations of violation of environmental, labor or tax laws.

We may also incur costs with such proceedings, including attorneys’ fees. We may also have some of our assets frozen or otherwise subject to liens, which may affect our liquidity. We may also not have the funds to secure certain proceedings via judicial deposit or by offering some other form of collateral. Our failure to provide collateral on such legal proceedings will result in the amounts we are required to pay due to these proceedings not being suspended (that is, will be due). Such failure to provide collateral may also subject us to seizure of our assets and garnishment of our income, as well as make it difficult for us to obtain certain statements of good tax standing. Any such consequence may adversely affect our financial conditions and results of operations.

We may be materially adversely affected in the event of unfavorable rulings, particularly in lawsuits or proceedings involving material amounts or that impose restrictions that prevent us from conducting our business as initially planned, liability for labor debts and/or obligations resulting from outsourcing and debts resulting from labor claims filed by third-party seeking their employment reclassification. See also “Item 4. Information on the Company — B. Business Overview — Legal and Administrative Proceedings.” In addition, unfavorable decisions in proceedings involving our management may prevent them from continuing to serve as our officers or directors and/or materially adversely affect our reputation and business.

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Our insurance policies may be insufficient to cover possible claims and losses.

There can be no assurance that our insurance policies will be sufficient in all circumstances to cover all of the risks to which we, and our assets, are subject. The occurrence of a significant uninsured claim or loss, or a claim or loss not subject to indemnification, either in whole or in part, or any failure by our third-party service providers to meet their obligations to us, or to purchase insurance, may materially adversely affect us.

Certain risks may not covered by insurers, such as war, acts of God, cyberattacks, data-breaches by our customers and third-party service providers, interruption of certain of our activities and human error. Additionally, natural disasters, meteorological phenomena, electricity shortage and other similar events may cause physical harm and loss of life, as well as interrupt our operations, damage our equipment and the environment, among others.

Our insurance coverage is also subject to timely payment of the premiums. Additionally, there can be no assurance that we will be able to maintain coverage under our insurance policies at reasonable rates or on otherwise acceptable terms. Any failure to maintain coverage may materially adversely affect us.

Third parties may prevent us from using the technology necessary to provide our services or subject us to intellectual property litigation.

We depend on intellectual property developed by third parties, including open-source libraries, to conduct our business, such as patents, computer programs and use licenses, among others. If our use of third-party intellectual property is considered illegal or irregular, we may be prevented, including judicially, from continuing to use such assets.

Additionally, our inability to negotiate a license to use intellectual property owned by third parties that is essential for our business on acceptable terms could oblige us to stop using the intellectual property in question or to stop offering services that incorporate such intellectual property. In these cases, we could be required to indemnify the third party or become involved in costly and complex litigation, which, regardless of the outcome, could materially adversely affect our business and results of operations.

We may be materially adversely affected if we are prohibited from using the brand “Inter” in any of our core verticals or if we fail to protect our intellectual property rights.

We believe the brand “Inter” is an important distinctive sign that help distinguish us from our competitors. Some of our applications for trademark over the brand “Inter” have been rejected by Brazilian National Institute of Intellectual Property (Instituto Nacional de Propriedade Industrial), or the INPI, including our application for trademark over the brand Inter for use in connection with financial services. We have proposed a suit, which is still ongoing, to reverse the decision of the INPI with respect to the “Inter” brand and judicially register the brand. Therefore, we do not currently own the trademark “Inter,” which is the common identifier among our different products. As a result, (i) our ability to protect the brand Inter and to prevent third parties from using this brand is limited, and (ii) there can be no assurance that competent authorities would not recognize exclusive rights of third party over the brand Inter in certain industries or jurisdictions, in which case we may be prohibited from using brand Inter in these industries or jurisdictions. If we are unable to register the brand Inter through our lawsuit or otherwise or are prohibited from using the brand Inter in any of our core verticals, particularly in our banking vertical, our business may be materially and adversely affected. See “Information on the Company—B. Business Overview—Intellectual Property.”

Furthermore, we may be unable to obtain intellectual property rights over our technologies and brands, and our existing trademark registrations and applications, and any trademarks that may be used in the future, may not provide us with competitive advantages or distinguish our products and services from those of our competitors. Also, our intellectual property rights may be contested, circumvented or found to be unenforceable, weak or invalid, and we may not be able to prevent third parties from infringing or otherwise violating them. We may have to litigate to enforce or determine the scope and enforceability of our intellectual property rights, trade secrets and know-how, which is expensive, could cause a diversion of resources and may not prove successful. Any failure to protect our intellectual property rights may materially adversely affect us.

A decline in our credit ratings may materially affect our liquidity and competitiveness as well as increase our funding costs.

Our funding costs and access to the debt capital markets are influenced by numerous factors, such as macroeconomic conditions, the regulatory environment for Brazilian banks, insufficiency of capital, failure to timely comply with our obligations to customers

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and suppliers, continuous availability of term deposits in the local market and failure to enlarge our credit portfolio. As a result, we are significantly dependent on our credit risk ratings. These ratings are provided by private ratings agencies that may at any time lower or withdraw our credit ratings or place us on a negative “credit watch.”

Any unfavorable change in the abovementioned factors may give rise to a negative impact on our credit rating, potentially increasing our lending costs and limit our access to the capital markets, which may, in turn, result in a decrease in our revenues and materially adversely affect our liquidity. There can be no assurance that ratings agencies will not lower our credit ratings or place us on a negative credit watch. Changes in circumstances, whether real or perceived, may significantly alter our credit ratings, which may, in turn, materially adversely affect our results of operations and liquidity.

We may be unable to identify, complete, integrate or obtain the benefits of past and future acquisitions or commercial partnerships.

We have engaged in mergers and acquisitions and commercial partnerships in the past and may pursue acquisitions and other commercial partnerships in the future as part of our growth strategy. There can be no assurance that we will be able to identify and execute future acquisition or commercial partnership opportunities.

Our ability to successfully execute acquisitions may be limited by the number of acquisition targets available, internal demand for resources, our ability to obtain financing (to the extent necessary and on satisfactory terms) for larger acquisitions and our ability to obtain the required corporate, regulatory or governmental approvals. In addition, even if we are able to identify acquisition targets, third parties with which we have a commercial relationship may be unwilling to enter into agreements on commercially balanced terms for a particular transaction. We may experience significant delays in completing acquisitions, which may not come to fruition for a number of reasons, including failure to meet specified conditions or to obtain the required regulatory approvals. Unanticipated additional conditions for approval may also be imposed. The negotiation and completion of potential acquisitions, whether or not consummated, may potentially affect our current operations or divert substantial resources. As a result, our business, growth prospects, results of operations and financial conditions may be materially adversely affected.

In addition, acquisitions may expose us to unknown obligations or contingencies incurred prior to the acquisition of the target or its assets. The diligence performed to assess the legal and financial condition of the target, as well as any contractual guarantees or indemnities received from the target sellers may be insufficient to protect or indemnify us for any contingencies that may arise. Any significant contingencies arising from acquisitions may materially adversely affect our business and results of operations. In addition, we may acquire companies that are not subject to independent external audits, which may increase the risks related to the acquisition.

As a result of a number of factors, we may be unable to benefit from completed acquisitions (including USEND), including as a result of our inability to:

Moreover, the closing and success of any transaction are, at least in part, subject to a number of economic and external factors that are beyond our control. Any combination of the factors mentioned above may result in our inability to integrate acquired companies or assets or achieve the expected growth or synergies of a particular transaction, which may materially adversely affect our business, results of operations and financial condition.

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Our international expansion efforts may not be successful, or may subject our business to increased risks.

Currently, our operations are concentrated in Brazil, but we plan to expand our operations internationally.

As part of our growth strategy, we may expand our operations by offering our products and services in additional regions, where we have no experience. We may not be successful in expanding our operations into these markets in a cost-effective or timely manner, if at all, and our products and services may not experience the same market adoption in such international jurisdictions as we have enjoyed in Brazil. In particular, the expansion of our business into new geographies (or the further expansion in geographies in which we currently operate) may depend on the local regulatory environment or require a close commercial relationship with one or more local banks or other intermediaries, which could prevent, delay or limit the introductions of our products and services in such countries. Local regulatory environments may vary widely in terms of scope and sophistication.

We also may not be able to recoup our investments in new geographies in a timely manner, if at all. If our expansion efforts are unsuccessful, including because potential customers in a given jurisdiction fail to adopt our products and services, our reputation and brand may be harmed, and our ability to grow our business and revenue may be adversely affected.

Even if our international expansion efforts are successful, international operations will subject our business to increased risks, including:

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As part of our international expansion strategy, in January 2022 we completed the acquisition of 100% of the share capital of USEND. USEND is engaged in the money transmittal business in the United States, which is a regulated business. In addition to the risks common to acquisitions mentioned above, we may be unable to fully integrate USEND operations in our business or be able to leverage USEND’s operations to achieve our international expansion goals. Additionally, USEND is subject to the scrutiny of more than 40 state regulators in the United States, and subject to certain compliance obligations. Such regulations may restrict the ways which we are allowed to conduct our business, as well as expose us to money penalties or loss of licenses if we fail to comply with the applicable regulation. As it related to our acquisition of USEND, certain approvals for change of control of USEND are still pending. USEND is also exposed to the risk of downturn in remittances to or from the United States and to changes in regulations that may impact on remittances to or from the United States. We cannot guarantee that a successful integration will occur or that we will be able to capture all of the anticipated synergies.

As a result of these risks, our international expansion efforts may not be successful or may be hampered, which would limit our ability to grow our business.

Disruption or volatility in global financial and credit markets could adversely affect the financial and economic environment in the countries in which we operate, most notably Brazil, which could have a material adverse effect on our business, financial condition and results of operations.

Our operations are dependent upon the performance of the economies in which we do business, Brazil in particular. Crises and volatility in the financial markets of countries other than Brazil may affect the global financial markets and the Brazilian economy and may have a negative impact on our operations.

Volatility and uncertainty in global financial and credit markets have generally led to a decrease in liquidity and an increase in the cost of funding for Brazilian and international issuers and borrowers. Such conditions may adversely affect our ability to access capital and liquidity on financial terms that are acceptable, if at all. If we are unable to access capital and liquidity on financial terms acceptable to us or at all, our financial condition and the results of our operations may be adversely affected. In addition, the economic and market conditions of other countries, including the United States, countries in the European Union and emerging markets, may affect the volume of foreign investments in Brazil. If the level of foreign investment declines, our access to capital may likewise decline, which could negatively affect our business, ability to take advantage of strategic opportunities and, ultimately, the trading price of our Class A common shares.

Further, the demand for credit and financial services, as well as our customers’ ability to make payments and deposits, is directly impacted by macroeconomic variables, such as economic growth, income, unemployment rates, inflation and fluctuations in interest and foreign exchange rates. Disruptions and volatility in the global financial markets may have significant consequences in the countries in which we operate, such as volatility in the prices of securities, interest rates and foreign exchange rates. Higher uncertainty and volatility may result in a slowdown in the credit market and the economy, which, in turn, could lead to higher unemployment rates and a reduction in the purchasing power of consumers. Such events may significantly impair our customers’ ability to perform their obligations and increase overdue or non-performing loans, resulting in an increase in the risk associated with our lending activity.

A significant increase in the number of our digital accounts in a short period of time may negatively impact our business, results of operations and reputation.

We reached approximately 16 million customers on December 31, 2021, an increase of 87%, compared to December 31, 2020. This significant increase in the number of customers in a short period of time increases our exposure to a number of operating risks, including failures in our ability to register banking transactions, as well as the unavailability of systems that are crucial to our business operations, the processing of gains and losses on public and private securities, detecting fraud and the settlement of purchase and sale orders in the capital markets, among other operating processes that may be negatively impacted. The realization of one or more of these risks may materially adversely affect our results of operations, financial condition and reputation.

We and our subsidiary, Inter Shop, may not be able to maintain our strategies for the development and maintenance of our e-commerce & on-demand services platform.

We and Inter Marketplace Intermediação de Negócios e Serviços Ltda., or Inter Shop, our subsidiary that operates our e-commerce & on-demand services platform, perform e-commerce transactions through our digital application. If we are unable to maintain our

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strategies for the development and maintenance of our e-commerce & on-demand services platform, including maintaining our contracts with certain suppliers on whom we depend to maintain our e-commerce operations, we will be impaired in our ability to effect e-commerce transactions and, as a result, our business may be materially adversely impacted.

Additionally, companies that sell their products on Inter Shop are free to leave the platform and are not bound by non-competition or similar agreements. If we are unable to retain enough companies selling their products on our platform, our e-commerce activities may halt, which could materially adversely affect us.

We may be materially adversely affected by the operations of our subsidiaries and investees.

We carry out certain of our activities through our subsidiaries Inter Digital Corretora e Consultoria de Seguros Ltda., or Inter Seguros, Inter Distribuidora de Títulos e Valores Mobiliários Ltda., or Inter DTVM, Inter Shop, Inter Asset Holding S.A., or Asset Holding, which controls Inter Asset Gestão de Recursos Ltda, or Inter Asset, Inter Food S.A., or Inter Food, Acerto Cobrança e Informações Cadastrais S.A., or Meu Acerto, and USEND, and through our associate Granito Instituição de Pagamento S.A., or Granito. The income earned by these companies contributes to our results of operations. Accordingly, in the event that our subsidiaries and associates incur losses, we may not receive dividends or other distributions from these companies. In addition, if, for any legal reasons due to new laws or bilateral agreements between countries, our Brazilian subsidiaries are unable to pay dividends to Cayman Islands companies, or if a Cayman Islands company becomes incapable of receiving them, we may not be able to make any dividend payments in the future.

We have partner investors in Inter Seguros, Inter Asset, Granito, Inter Food and Meu Acerto, with whom we maintain voting agreements according to which certain decisions that impact on the business require the consent of the partner, who may have economic interests different from ours and may act in a manner contrary to our strategy or objectives. If we are unable to obtain the partners’ consent to approve the decisions we deem appropriate, we may not be able to implement, in whole or in part, the business strategy for Inter Seguros, Granito, Meu Acerto or Inter Asset that we believe to be the best suited to our interests.

Additionally, failures by our subsidiaries to continue operating or to provide all services currently provided may result in financial losses and damage to their reputations and to our reputation given that these subsidiaries provide services directly to our customers.

The retail sector in Brazil is highly competitive, which may adversely affect the participation of our subsidiary, Inter Shop, in the market, consequently affecting the net revenue of our operations.

Inter Shop faces intense competition. Some of Inter Shop competitors are retailers or marketplace operators that carry inventory benefit from a more beneficial tax treatment, as they obtain tax credits that are not available to e-commerce operators that do not carry inventory, like Inter Shop. In addition, it competes with a large number of multinational merchandise retail chains in general, as well as with hypermarkets that offer their customers durable goods. Some of these international competitors may have access to larger sources of finance at lower costs than Inter Shop.

Moreover, consumers’ purchasing decisions are affected by factors such as brand recognition, product quality and performance, credit availability, price and habits and preferences of each consumer. Some of our competitors may make marketing investments substantially larger than ours. If our advertising, promotional or marketing strategies are unsuccessful, or if we are unable to offer new products (and services) that meet market demands or changes in consumer habits, or if we are unable to successfully manage introduce new products or the profitability of these efforts or, if for other reasons, our end consumers believe that our competitors’ products and services are more attractive, then Inter Shop sales, profitability and operating results may be affected, which can have negative impacts on our results.

Competition in e-commerce can also intensify. Other retail and e-commerce companies may enter into alliances or commercial agreements that will strengthen their competitive position. As the customer portfolio grows and increases their loyalty in the various segments of the Internet market, participants in these segments will be able to seek to expand their business to the market segments in which we operate. In addition, new technologies can further intensify the competitive nature of online retailing. We believe that the nature of the Internet as an electronic shopping facilitates the entry of competitors and allows for purchases through price comparison. This increase in competition may reduce Inter Shop sales, profitability and operating results may be affected, which may have a negative impact on our results. Competitors may come to provide more resources for technology and marketing development than we do. Additionally, as the use of the Internet and other online services increases, retailers operating in this

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market may be acquired, receive investments, or enter into other business relationships with larger, more established companies with financial resources.

We control Inter Seguros, an insurance broker. Potential changes in the insurance brokerage regulatory environment could have a material adverse effect on our business, financial condition, operating results and prospects for expansion.

The activities of Inter Seguros are subject to supervision, especially by the Bureau of Private Insurance, or SUSEP, and the National Bureau of Private Insurance, or CNSP. Changes in the laws and regulations applicable to the insurance and reinsurance market, and insurance brokers, could have a material adverse effect on the business of insurance companies. There is no guarantee that the Brazilian government, whether through SUSEP or any other instrumentality/government agency, will not change these laws and regulations, which may prevent or restrict the operations of Inter Seguros, adversely affecting our business, financial situation, operating results and prospects for expansion.

We contract for the storage of data and information produced in our operations through “cloud” storage. Any interruptions or failures in IT systems by those responsible for storing this data or information may result in the loss or disclosure of material information, the temporary interruption of our operations, and liability to third parties that may be, directly or indirectly, affected by such occurrences.

Our operations depend on the efficient and uninterrupted operation of our IT systems. Data and information generated from our operations are processed and stored on virtual servers directly on the internet through cloud storage. If cloud servers are interrupted by internal failures, failures in the provision of services by contracted suppliers (whether resulting from a computer virus or physical or electronic invasion) or any inability to meet contractual obligations, our operations may be temporarily interrupted and we may be liable to third-parties that are affected directly or indirectly by such occurrences, which may materially adversely affect us.

We outsource the storage of data and information produced in our operations directly on the worldwide web by using relevant cloud providers. Any interruptions or faults in the information technology systems responsible for storing such data and information may result in the loss or disclosure of relevant Information, temporary interruption of our operations, as well as our liability to third parties, which come to be directly or indirectly affected by such events, which may adversely impact on our operations.

Our operations depend on the efficient and uninterrupted operation of our IT systems. The data and information generated in our operations are processed and stored on virtual servers directly on the World Wide Web, by using relevant cloud computing providers. If these servers are interrupted due to their own failures, failures in the provision of services by the contracted suppliers, whether due to virus infection on the computers, physical or electronic invasion, or due to the inability to comply with the applicable contractual provisions, there may be a temporary interruption of our operations, as well as our accountability to third parties that may be directly or indirectly affected by such occurrences, which may adversely affect our operations and, consequently, our results.

We cannot guarantee that our suppliers, business partners and shopping sellers will not engage in improper practices. We may be held responsible for the default and marketing of inadequate products by the sales partners registered on our e-commerce & on-demand services platform, and may cause damage to our reputation, brands and financial results.

We and our subsidiary Inter Shop cannot guarantee that some of our suppliers and business partners of our e-commerce & on-demand services platform will not present irregularities in their operations due to non-compliance with tax, labor, social and environmental and anti-corruption legislation. It is possible that partners may use outsourcing of the production chain, or even that these potential irregularities may be used to lower the cost of their products.

Through our e-commerce & on-demand services platform, Inter Shop allows sales partners to register and offer their products within their e-commerce channels. Through this model, Inter Shop acts as an intermediary in sales transactions, and it is not under our control whether partners fulfill their obligations and responsibilities to their customers. If any of these partners do not meet their obligations to customers, we and/or Inter Shop may have our indicators of customer service negatively impacted, suffer sanctions from regulatory agencies and find an increase in the number of civil and tax proceedings, among others, and be required to bear costs to customers who purchased their products through our e-commerce & on-demand services platform. We and Inter Shop may still be held responsible for partners trading, or even registering and offering on our platform, counterfeit, illicit and/or illegal products. These aspects may subject us to reputational losses, consequently, loss of attractiveness to our customers, which could adversely impact on our net income and operating income, and to fines and/or sanctions to be applied by competent bodies. Any such events could adversely impact on the market value of our securities.

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Additionally, we and Inter Shop may be jointly or severally liable if our suppliers and/or business partners demonstrate problems already described, in addition to default, by partners and customers of Inter Shop.

Increased delinquency by credit borrowers could materially adversely affect us.

The ability of our borrowers to pay their obligations on time is directly related to economic conditions in Brazil. Economic crises, such as the crisis caused by the COVID-19 pandemic, and poor economic performance, may result in an increase in credit defaults. The effects of the most recent economic crisis in Brazil are still evident and future default rates may differ from our current projections. An increase in the default rates of our credit portfolio may result in increased losses within our lending operations or increased loss provisions, and materially adversely affect us.

Any deterioration in the credit quality of receivables that guarantee a portion of our credit portfolio and any inability to accurately estimate impairment losses may materially adversely affect us.

A portion of our corporate lending operations is guaranteed by receivables due to the borrowers from their respective customers. Any unfavorable change in the credit quality of these third-party debtors may negatively affect our ability to receive amounts owed by our customers, which may adversely affect us.

Provisions for expected credit losses are based on current valuations and expectations related to various factors that affect the quality of our credit portfolio. These factors include, among others: the financial condition of borrowers and their payment capacity and intentions; the realizable value of guarantees; government macroeconomic policies; interest rates and the legal and regulatory environment. Because of the number of factors beyond our control, current (or future) provisions for expected credit losses may not be sufficient to cover the final unrecovered losses. We may be required to increase our provision for expected credit losses and may be materially adversely affected to the extent that our assessment and expectations regarding the aforementioned factors are different from actual events, if there is a deterioration in the quality of our total credit portfolio for any reason or if future actual losses exceed the estimates. We may be materially adversely affected if we are unable to control or reduce default rates or the incidence of poor quality credit.

The effectiveness of our credit risk management is affected by the quality and scope of information available in Brazil.

In determining the credit capacity of customers, we use credit information available in our database, as well as public credit customer information provided by the Central Bank and other sources. Due to limitations in the availability of information and the information infrastructure in existence in Brazil, our credit risk assessment associated with a particular customer may not be based on complete, accurate or reliable information. In addition, there can be no assurance that our credit scoring systems collect complete or accurate information that reflects the actual behavior of customers or that their credit risk can be properly assessed. We rely on other publicly available resources and internal resources, which may not be effective. As a consequence, our ability to efficiently manage credit risk, and subsequently, our provision for impairment losses, could be materially adversely affected.

We may incur financial and reputational losses due to our relationship with shareholders, suppliers, business partners and/or customers, whose activities may result in negative social environmental impacts that may materially adversely affect us.

We have a diversified customer base that may be exposed to social and environmental risk factors. Social and environmental risk may materialize for our customers in a variety of ways and with differing degrees of intensity in relation to economic, social and environmental scenarios, resulting in financial and/or reputational losses that may impact on the relationship with us, and materially adversely affect us.

We may become a party to legal proceedings, receive infraction notices and fines, be accused of being involved in the business of our customers, suppliers, business partners or third-party service providers and, consequently, any environmental harm caused by them, any of which may adversely affect our operations and reputation.

Our controls to identify environmental risks in property offered to us as collateral may fail. Accepting assets with environmental risks may subject us to additional costs (such as repairing the environmental harm in the property in question) and fines, both of which may adversely affect our financial condition and reputation. Such assets (whether or not used) may become social and environmental liabilities due to contamination, deforesting and illegal occupations, among others. Such events may adversely affect our operations, financial condition and reputation.

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We may not be able to continue to grow our loan portfolio or effectively manage significant increases in our loan origination, both of which could negatively affect our reputation and business, financial condition, and results of operations.

A substantial part of our loan portfolio consists of loans to real estate buyers and refinancing existing loans. Historically, most of our real estate loan origination has been in connection with refinancing existing loans (including from other financial institutions) rather than granting new loans. Accordingly, if interest rates rise, we expect to face more competition for originating loans through refinancing, as well as less demand for loans overall, and thus we could be adversely affected if we are unable to increase our share of originations of loans through refinancing.

Additionally, our ability to originate loans is also subject to other market factors. Such factors include, for example, reductions in the overall level of refinancing activity, slow growth or less home financing activity or inadequate supply in the housing market. Any such factors, and others, can impact our ability to continue to grow our loan origination volume and may force us to accept lower margins in our loans in order to remain competitive, which could adversely affect our business.

We have identified material weaknesses in our internal controls over financial reporting. If we are unable to remedy these material weaknesses or fail to establish and maintain a proper and effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements, our results of operations and our ability to operate our business or comply with applicable regulations may be adversely affected.

In connection with the audit of the consolidated financial statements for the year ended December 31, 2021, our external auditors obtained an understanding of the internal controls relevant to their audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of our internal controls in accordance with the provisions of the Sarbanes-Oxley Act of 2002. During this process, material weaknesses in our internal controls over financial reporting as of December 31, 2021, were identified, which were communicated to management. A material weakness is a deficiency, or combination of controls deficiencies, in internal controls over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified relate to (i) lack of controls over accounting reconciliations, (ii) lack of controls over manual entries, (iii) lack of a processes for identification of significant disclosure, including market risk, acquisition of business and income tax reconciliation and (iv) lack of formal accounting policies. We plan to adopt measures that will improve our internal controls over financial reporting, but we cannot assure you that our efforts will be effective.

Our management has not completed an assessment of the effectiveness of our internal controls over financial reporting and our independent registered public accounting firm has not conducted an audit of our internal controls over financial reporting. After completion of the Corporate Reorganization, we will be subject to the Sarbanes-Oxley Act, which requires, among other things, for us to establish and maintain effective internal controls over financial reporting and disclosure controls and procedures. Under the current rules of the SEC we will be required to perform system and process evaluation and testing of our internal controls over financial reporting to allow management to assess the effectiveness of our internal controls. Our testing may reveal other material weaknesses or significant deficiencies and result in the conclusion that our internal controls over financial reporting is ineffective. We expect to incur additional accounting and auditing expenses and to spend significant management time in complying with these requirements. If we are not able to comply with these requirements in a timely manner, or if we or our management identify other deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses, the market price of our shares may decline and we may be subject to investigations or sanctions by the SEC and other regulatory authorities. In addition, these new obligations will also require substantial attention from our senior management and could divert their attention away from the day-to-day management of our business. These cost increases and the diversion of management’s attention could materially and adversely affect our business, financial condition and results of operations.

We may be subject to the Economic Substance Regime in the Cayman Islands.

On December 27, 2018, the Cayman Islands published The International Tax Co-operation (Economic Substance) Act (As Revised) and The International Tax Co-operation (Economic Substance) (Prescribed Dates) Regulations (As Revised) (together, the “Initial Act”). The Initial Act was amended by several amendment regulations, which were subsequently consolidated into the International Tax Co-operation (Economic Substance) Act (As Revised), or the Economic Substance Act. The Economic Substance Act is supplemented by the issuance of related Guidance on Economic Substance for Geographically Mobile Activities, version 3.1 of which was issued on June 30, 2021. Inter & Co may be subject to the Economic Substance Act. Given the Economic Substance Act was only recently enacted, and our business activities and operations may change from time to time, it is difficult to predict what

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impact the adoption of the Economic Substance Act could have on us and our subsidiaries. For example, compliance with any applicable obligations may create significant additional costs that may be borne by us or otherwise affect our management and operation. We will continue to consider the implications of the Economic Substance Act on our business activities and operations and reserve the right to adopt such arrangements as we deem necessary or desirable to comply with any applicable requirements.

We are subject to Brazilian consumer protection laws and governmental consumer protection authorities. Non-compliance with consumer protection laws and agreements entered into with authorities may adversely affect our reputation, brands and financial results.

The Consumer Protection Code, which is applicable to financial institutions, regulates commercial practices and provides for, among other things, product and service liability, strict liability of the supplier of products or services, reversal of the burden of proof to the benefit of consumers as the weaker party, the joint and several liability of all companies within the supply chain, abuse of rights in contractual clauses, advertising and information on products and services offered to the public. The Consumer Protection Code further establishes the consumers’ rights to access and modify personal information collected about them and stored in private databases. Brazilian consumer protection laws could result in substantial compliance costs. Financial institutions are generally exposed to a significant number of administrative and judicial claims from consumers, and scrutiny of federal and state prosecution offices and associations for protection of consumers rights. We are involved in certain public civil claims or other types of class actions available under Brazilian law with claims relating to our payroll deduction loans and other matters, and may be subject to new claims in the future. The public prosecutor’s office and governmental consumer protection authorities may inspect and initiate administrative proceedings related to regulatory compliance. In such cases, we may enter into consent orders (termos de ajustamento de conduta) with these authorities, through which we will agree to perform (or abstain from performing) certain actions.

As of the date of this annual report, we have entered into three settlement agreements with the public prosecutor’s office and governmental consumer protection authorities in which we agreed to certain obligations related to the facts of each proceeding. See “Item 4. Information on the Company — B. Business Overview—Settlement Agreements.” Non-compliance with such agreements may subject us to agreed-upon fines and legal proceedings, both of which may adversely affect our reputation, brands and financial results.

As the regulatory framework for artificial intelligence and machine learning technology evolves, our business, financial condition and results of operations may be adversely affected.

The regulatory framework for artificial intelligence and machine learning technology is evolving and remains uncertain. It is possible that new laws and regulations will be adopted, or existing laws and regulations may be interpreted in new ways that would affect the operation of our platform and the way in which we use artificial intelligence and machine learning technology, including with respect to fair lending laws. Further, the cost to comply with such laws or regulations could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations.

Changes made by the Central Bank in the basic interest rate may materially adversely affect our operating results and financial condition.

The Monetary Policy Committee of the Central Bank (Comitê de Política Monetária), or COPOM, periodically determines the Special System for Settlement and Custody (Sistema Especial de Liquidação e de Custódia), or SELIC rate, the basic interest rate of the Brazilian banking system, which serves as an important instrument for meeting inflation targets. The basic interest rate has fluctuated frequently in recent years. The COPOM has often adjusted the basic interest rate due to economic uncertainties and to achieve the objectives determined by the Brazilian government’s economic policy.

For example, on August 5, 2020, the basic interest rate reached 2.0%, the lowest level in history, a decision taken at a time of strong reduction in the level of activity of the global economy. However, the basic interest rate has increased significantly during the year of 2021. On February 2, 2022, the SELIC rate was increased from 9.25% to 10.75%, due to concerns with inflationary pressures.

Increases in the basic interest rate may materially adversely affect the results of our operations, by reducing the demand for credit, increasing funding costs and increasing the risk of customer default, among other consequences. In particular, lending tends to be more affected by an increase in the basic interest rate, which may materially adversely affect us. Reductions in the basic interest rate may also materially adversely affect us by, for example, reducing revenues from revenue-generating assets and decreasing margins. We are unable to predict whether the Central Bank will maintain current interest rates.

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Changes in Brazilian tax and social security laws may materially adversely affect our operating results and financial capacity.

The Brazilian government regularly implements changes in tax, social security and other laws and regimes that affect us and our customers. These changes include changes in tax rates and, occasionally, the establishment of temporary rates, the proceeds of which are used for certain governmental purposes.

These measures may result in increased tax payments and social security contributions, which may materially adversely affect us. There can be no assurance that conditions will be sufficient to maintain the profitability we achieved in previous years should there be substantial increases in taxes levied on us, our subsidiaries and our operations.

In addition, past tax reforms have brought uncertainties with respect to the national financial system, increased the cost of credit and contributed to an increase in customer defaults. It is not possible to predict future tax reforms that may be implemented by the Brazilian government or their effects or ensure that any tax reform that may be undertaken does not materially adversely affect us.

We are unable to quantify the effects of changes in tax rules and regulations that may be implemented by the Brazilian government in the future. There can be no assurance that future changes in tax rules and regulations will not have a material adverse effect on our results and operations or those of our customers. In this respect, a proposal for a tax reform presented by the Ministry of Economy is currently being discussed in Brazil, including certain rules regarding the taxation of individuals, legal entities and financial investments. Two of the main points of the tax reform bill are the taxation of dividends at 15% rate and the extinguishment of payments of interest on net equity (juros sobre o capital próprio). This bill was approved by the House of Representatives in August 2021 and is subject to further approval by the Brazilian Senate and signature of the Brazilian President. The terms of the tax reform and their impact on our business will not be known until the final version of the tax reform is approved by Congress and signed by the Brazilian President, if that occurs.

The increasingly competitive environment of the Brazilian banking sector may materially adversely affect us.

The market for financial and banking services in Brazil is highly competitive. We face growing competition from other Brazilian and international banks, both public and private, as well as fintechs in Brazil. A number of institutions have demonstrated interest in operating with a digital focus, attempting to attract new customers, which intensifies competition in the sector.

There can be no assurance that we will be able to continue to compete adequately, particularly with the entry of larger domestic and foreign financial institutions, as well as fintechs into Brazil. Specifically regarding fintechs, those entities usually operate under licenses subject to lighter regulatory requirements when compared with our multi-service bank (banco múltiplo) license, such as the sociedades de crédito direto and the payment institutions, which may bear lower operating costs in comparison to the costs applicable to us or other financial institutions. See “Regulatory Matters—Brazilian Banking Regulation.”

Increased competition makes it more difficult for us to increase our customer base and expand our operations, which in turn can lead to a reduction of our profit margins, and increasing the competition for acquisition targets, commercial partnerships and other similar investment opportunities.

In addition, if our customer service levels are perceived by the market as significantly below that offered by competing financial institutions, we may lose existing and prospective business opportunities. If we are not successful in retaining and strengthening our customer relationships, we may lose market share, incur losses in some or all activities, or fail to attract new ones and retain existing customers, which may materially adversely affect us.

Our business is significantly impacted by the Brazilian regulatory environment.

Historically, the Brazilian government has implemented or amended the regulations that govern financial institutions in connection with the implementation of the Brazilian government’s economic policy. These regulations are constantly modified by the Brazilian government in order to control the availability of credit and reduce or increase consumption. Certain controls are temporary in nature and may be modified from time to time in accordance with the Brazilian government’s credit policies. Other controls were introduced and remain in force or were gradually reduced. Since regulatory changes may occur frequently, historical operating results do not necessarily provide any indication of our expected results in the future. Brazilian financial institutions are subject to extensive and continuous regulatory review by the Central Bank.

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We have no control over regulations relating to banking operations, including, but not limited to, those that govern:

The regulatory framework, which establishes the guidelines to be followed by Brazilian financial institutions (including banks, brokerage firms and leasing companies) has been continuously changing. Existing laws and regulations may be amended, the manner in which existing laws and regulations are enforced or interpreted may change, and new laws or regulations may be adopted. Moreover, regulations issued by the Central Bank are not subject to the legislative process and, as such, may be enacted and implemented expeditiously, affecting our activities in an unforeseen and sudden manner. Any such changes may materially adversely affect us.

Moreover, the Central Bank has periodically modified the level of reserves and compulsory deposits that Brazilian banks are required to maintain with the Central Bank. Reserve and compulsory deposit requirements may reduce our liquidity and ability to provide loans and undertake other investments. In the future, the Central Bank may increase reserve requirements or establish new reserve or compulsory deposit requirements, and such developments may materially adversely affect us.

In addition, any restrictions on bank loan interest rates may materially adversely affect us, including in relation to our results of operations and our ability to grant loans. Decree No. 22,626/33, or the Brazilian Usury Law, prohibits banks from charging interest rates of more than 12% per year. However, the Banking Reform Law, Law No. 4,595, of December 31, 1964, or Law No. 4,595, exempted banks from this prohibition and was upheld in several recent court decisions. Any changes in the interpretation of this exception, amendments to applicable laws or regulations limiting the interest rate which may be applied to the loans that we grant may materially adversely affect us.

Changes in compulsory deposit requirements may reduce our operating margins.

The Central Bank has periodically changed the level of compulsory deposits that financial institutions in Brazil must maintain. During the first quarter of 2022 and the years of 2021 and 2020, the compulsory deposit rules linked to time deposit and demand deposit changed 14 times, requiring that compulsory deposits correspond to 2%, at the lowest, and 65%, at the highest, of overall deposits of a multi-service bank (such as Banco Inter). The Central Bank may increase our compulsory deposit requirements in the future or impose new requirements. Compulsory deposits typically generate lower returns than other investments given that no interest is received on a portion of our compulsory deposits with the Central Bank and given that the monies cannot be loaned out. Any increase in compulsory deposit requirements may reduce our ability to lend funds and make other investments, which may materially adversely affect us.

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We may be materially adversely affected as a result of some intervention by the Central Bank in other Brazilian financial institutions.

Brazilian banks may experience a decrease in deposits as a result of certain circumstances and conditions in the Brazilian financial market, particularly relating to the financial health of these institutions, as previously observed in various local and global crises, which had a pronounced effect on the availability of liquidity for Brazilian banks. There can be no assurance that the Central Bank will not intervene in other financial institutions. If the Central Bank undertakes an intervention, even in other financial institutions that are not part of our economic group, we may experience unexpected withdrawals of funds that may materially adversely affect us.

Payroll loans and the policies of public entities in relation to payroll loans are subject to change.

Payroll deductions are regulated by a number of federal, state and municipal laws and regulations that establish maximum limits for deductions. These laws and regulations enforce the irrevocable permission given by a civil servant, private sector worker or INSS beneficiary authorizing deduction from payroll to repay the loan. In April 2020, Resolution No. 958, issued by the Board of the Employee’s Severance Guarantee Fund (Fundo de Garantia por Tempo de Serviço – FGTS), allowed the structuring of a new credit product by financial institutions, consisting of the extension of loans secured by funds held by individuals within their FGTS account and that have chosen to withdraw part of their funds on an yearly basis, on the month of their birthday (the loans are secured by, and paid directly with, such funds) (FGTS Loans).

The enactment of any new law, regulation or amendment, or the repeal or emergence of a new interpretation of existing laws or regulations that result in a ban or restriction on our ability to make these direct deductions could increase the risk profile of our credit portfolio, resulting in a higher percentage of loan-related losses. We cannot guarantee that laws and regulations governing direct deductions from employee payrolls or from INSS or FGTS benefits will not be altered or suspended in the future.

In addition, we are subject to the imposition of limits on the interest rates charged on FGTS Loans and loans to INSS pensioners, retired persons and civil servants of other government entities with which we enter into agreements for our payroll loans, as well as to delays in receiving the payroll deductions. We cannot guarantee that the entities with which we enter into agreements will maintain the maximum interest rates applicable at their current levels.

Moreover, the granting of FGTS Loans, payroll loans to civil servants, retired persons and INSS pensioners requires the authorization of certain public sector bodies. The Brazilian government or other government entities may alter the regulation of these authorizations. Currently, we do not have the required authorization to offer payroll loans to employees of certain municipal and State governments due to statutory restrictions which require such transactions to be authorized only for government-owned banks. Other government agencies may impose regulations that restrict or prevent us from offering payroll loans to employees. In addition, unfavorable administrative or judicial rulings, related to or issued in the context of payroll loans, including, without limitation, rulings imposing any restrictions or encumbrances on us relating to (1) our granting of payroll loans; or (2) the deduction of amounts directly from the paychecks of retired persons, pensioners, staff and employees of the public and private sector, may lead to an increase in losses and expenses related to such operations, which may materially adversely affect us.

Furthermore, if an employment contract between a public employer and the payroll borrower is terminated or if the payroll borrower fails to receive the applicable benefit or payment for any reason, including death, the payroll borrower may default on the payroll loan.

In addition, the agreement entered into between us and the INSS for the purpose of lending to INSS beneficiaries has a fixed term and must be periodically renewed. There can be no assurance that this agreement will be renewed. Any failure to renew this agreement may materially adversely affect our payroll and payroll credit card operations. In addition, if a public employer suffers losses or declares bankruptcy or otherwise experiences financial difficulty, it may be unable to pay the salaries of payroll borrowers. Any of the abovementioned risks may increase our risk under our payroll and payroll credit card operations, and may increase our implementation of default control measures, such as reducing the borrower’s credit limit or implementing borrower lockouts such that the payroll borrower cannot enter into new payroll loans. The realization of any of these risks may materially adversely affect our financial condition and results of operations.

During the pandemic, new rules relating to payroll loans came into effect (and other measures may still be enacted), which included the provision of a grace period before the commencement of the payroll deduction. Law No. 14,131, of March 30, 2021, established

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that financial institutions may offer, at their discretion a grace period for the beginning of the discount from the first installment on the social security benefit, for the payment of payroll loans, provided that it does not exceed 120 days.

Moreover, any changes regarding the abovementioned processes and regulations may result in changes to the system we use to deduct payments due from employee salaries. A new system may not be as effective as the current payroll deduction system and may result in increased operating costs in addition to new implementation costs. As a result, we may find it necessary to redirect our operations to products that may have an increased credit risk profile.

Certain claims over the payroll borrower’s income have priority over payroll loan payments and may result in the temporary suspension of, or permanent reduction in, payroll loan payments.

The INSS and other governmental entities impose a series of requirements on payroll deductible loans of INSS retirees and pensioners as well as public sector employees. In particular, payroll deductions for INSS retirees and pensioners and federal public servants cannot exceed 35% of the total monthly amount that payroll borrowers receives from the INSS or their employer, after deducting certain preferred expenses (such as alimony, INSS contributions and income taxes). The amount available for deductions from payroll after priority expenses is referred to as the payroll borrower’s margin. The margin is a total limit that applies to all deductions from the payroll of INSS retirees and pensioners and the salaries of federal public servants.

Suspension or reduction in payments deducted from payroll may occur when a borrower assumes additional obligations that have priority in payment over payroll loan payments, thereby reducing the amount of the borrower’s payroll available to make the payroll loan payments (with payments in respect of payroll credit cards having priority over other payroll loan payments). If the amount owed monthly by a payroll borrower exceeds the borrower’s margin that may be lawfully assigned, only the assignable amount may be deducted from the payroll borrower’s benefits or salary, as applicable, which may result in a partial payment or no payment of the payroll loan and materially adversely affect us.

The increase in the competitiveness of the banking sector due to the implementation of the Open Financial System (Open Banking) may hinder customer retention and affect our results.

On May 4, 2020, the CMN and the Central Bank enacted Joint Resolution No. 1/2020 and Central Bank Circular No. 4,015 that implemented the Open Financial System, or Open Banking, in Brazil, in order to facilitate the access of new players to the financial markets, as well as encouraging competition between financial institutions. The changes brought about by these new regulations started to demand the opening and sharing of information about the services of the main financial institutions in Brazil, and expansion of the portability of data and transactions of customers. As a consequence, financial institutions will be required to adopt certain technological standards for the implementation and operationalization of interfaces dedicated to sharing data and services. Thus, data from customers and services of financial institutions are now available for access by participants in the financial system, provided that the sharing of their data is previously allowed by customers. The implementation of Open Banking is expected to be completed in 2022.

We are currently required to participate in Open Banking as a payment transactions initiator (iniciador de transação de pagamento). If we are unable to be competitive in the face of these new market conditions or fully and duly observe the required technological standards, including those related to cybersecurity, we may experience difficulties in retaining customers and our financial results, as well as our reputation, may be negatively impacted.

We may face difficulties in adapting our operational structure to the requirements for the implementation of instant payment arrangements.

By issuing Central Bank Resolution No. 1, of August 12, 2020, and Central Bank Circular No. 4,027, of June 12, 2020 (which was revoked on April 1, 2022 by Central Bank Resolution No. 195, of March 3, 2022), among other ancillary rules, the Central Bank instituted and regulated, among other issues, the instant payment arrangement, or PIX, and the instant payments system, or SPI, which enables the making of instant payments (i.e. the electronic transfer of funds in which the transmission of the availability of the funds to the recipient user occurs nearly in real time and which service is available 24 hours per day, seven days per week and 365 days per year) through the SPI.

We cannot assure you that we will not need to make improvements or develop our operational structure necessary to reconcile and maintain our systems in compliance with the legal requirements for instant payments, which are in constant evolution and often

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require us to add new features or products to our portfolio (such as, for example, withdrawals – PIX saque – and change – PIX troco). In addition, we may experience operational problems when new features are introduced to the SPI due to new rules that may be enacted by the Central Bank. Such issues may result in complaints and administrative and judicial demands by customers and difficulties in retaining customers and require additional unforeseen investments, which may negatively impact on our financial results, as well as our reputation.

We are subject to various risks in our credit card operations.

We issue credit cards and payroll cards to our customers. Our credit card operations are subject to various risks, including risk of fraud and credit risk of our customers, as well as risk relating to the general economic conditions of the Brazilian economy. Fraud risks include losses from various types of fraud by our customers or third-parties, including use of stolen or fraudulent credit card data, attempted payments with insufficient funds and other forms of fraud. People use increasingly sophisticated methods to engage in illegal activities involving personal information, such as unauthorized use of another person’s identity, account information or payment information and unauthorized acquisition or use of credit or debit card details, bank account information and mobile phone numbers and accounts. Our credit risk with credit cards is the risk that our customer may not have enough funds to pay the credit card balance when due. This risk can be exacerbated if the models we use to determine the amount of credit we extend to each customer are not properly calibrated. Additionally, our credit card operations are relatively new. As such, we are still developing and implementing more sophisticated methods and models to mitigate the risks relating to our credit card operations.

Risks Relating to Brazil and the Global Economy

We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine. Our business may be materially adversely affected by any negative impact on the global economy and capital markets resulting from the conflict in Ukraine or any other geopolitical tensions.

Global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine. Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions. We are continuing to monitor the situation in Ukraine and globally and assessing its potential impact on our business.

Additionally, Russia’s prior annexation of Crimea, recent recognition of two separatist republics in the Donetsk and Luhansk regions of Ukraine and subsequent military interventions in Ukraine have led to sanctions and other penalties being levied by the United States, European Union and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, and the so-called Luhansk People’s Republic, including agreement to remove certain Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, payment system, expansive ban on imports and exports of products to and from Russia and ban on exportation of U.S denominated banknotes to Russia or persons located there. Additional potential sanctions and penalties have also been proposed and/or threatened. Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional funds and sell the shares we are offering. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described in this annual report.

The Brazilian government exercises significant influence over the Brazilian economy and government actions may materially adversely affect the Brazilian market and us.

Economic policies, including credit, monetary, tax and exchange policies, are used as instruments to maintain the functioning of Brazil’s economic system. In this context, changes in regulations of exchange controls, taxes and other areas applicable to services offered by financial institutions may materially adversely affect us.

Uncontrolled inflation, significant exchange rate variations, social instability and other political, economic and diplomatic events, as well as the Brazilian government’s response to these events, may materially adversely affect us. In addition, uncertainty regarding the guidelines of economic policy may contribute to a lack of confidence and increased volatility in the Brazilian capital markets, as well as in the price of securities of Brazilian issuers. It is not possible to predict with any certainty how the approval of any

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reforms, such as labor, social security, political and tax reforms, will impact on the Brazilian economy.  Continuing political uncertainty may affect the approval of important measures and lead to reversals in expectations, such as, but not limited to:

We cannot foresee which measures may be adopted by the Brazilian government, which measures (if and when implemented) may create instability in the Brazilian economy. For example, the deterioration in federal, state and municipal governments’ fiscal results in recent years has led to an unprecedented increase in gross debt as well as in the gross debt to GDP ratio. In this environment, the government may encounter difficulty honoring its commitment to pass on to us the credit installments deducted from the salaries of its employees, increasing our provisions for credit in general.

We are unable to estimate the impact of changes in Brazilian economic and fiscal policy. We also cannot predict how current or future measures may impact our business. Moreover, due to the current political and economic instability, there are substantial uncertainties in relation to future economic policies and we cannot foresee which policies will be adopted by the Brazilian government and whether these policies will materially adversely affect the economy or us. Any changes in the regulatory capital requirements, the reserve requirements or regulations that govern our products and services, for example, or continued policy uncertainty, may materially adversely affect us.

Political instability in Brazil, including instability resulting from corruption investigations, may materially adversely affect us. In addition, these investigations may result in reputational risks.

Historically, Brazil’s political landscape has influenced and continues to influence the performance of the country’s economy. Political crises have affected and continue to affect the confidence of both investors and the general public, which has resulted in an economic downturn and increased the volatility of securities issued by Brazilian companies. This risk has increased due to the upcoming presidential election in Brazil, in the second half of 2022.

The Brazilian markets have experienced an increase in volatility on account of the uncertainties generated by corruption investigations, led by the Federal Public Prosecutor’s Office and other authorities, and its impact on the Brazilian economy and political environment. Certain members of the federal executive and legislative branches, as well as senior officers of large state-

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owned companies, are facing allegations of political corruption due to having allegedly accepted bribes in contracts awarded by the Brazilian government to various construction, infrastructure, oil and agribusiness companies. There can be no assurance that all individuals directly or indirectly connected to us, including, employees, executive officers, board members, suppliers, service providers, or subcontractors, are not or will not be involved in criminal investigations (whether or not related to corruption) that may adversely affect our image and reputation.

The outcome of any such investigation is uncertain. We cannot foresee whether the investigations being carried out by the Federal Police and the Attorney General’s Office will lead to political and economic instability or whether there will be a future investigation. We are unable to predict the outcome of any such investigation (future or present), including its effects on the Brazilian economy.

The potential result of these and other investigations is uncertain, but they already had a negative impact on the image and reputation of the companies involved, as well as on the general perception of the Brazilian economy. The development of these cases has and may continue to adversely affect our business, financial condition, results of operations, as well as the market price of our shares. We cannot predict whether the ongoing investigations will result in economic and political instability, nor whether there will be new allegations against government and elected officers or private companies in the future. We cannot predict the results of the ongoing investigations, nor their impact on the Brazilian economy and stock market.

We cannot predict how the Brazilian government may impact on the overall stability, growth prospects and the country’s economy and political situation. Nor can we predict how ongoing and future investigations may affect Brazil’s political and economic environment. Likewise, any difficulty for the Brazilian government in obtaining a majority of votes in the Brazilian Congress may result in a political standstill, protests and strikes, all of which may adversely affect our operations. Any of the above factors may create political uncertainty, which may materially impact on the Brazilian economy, our business, financial conditions and the results of our operations.

Any further downgrading of Brazil’s credit rating may have a material adverse effect on our funding costs.

Rating agencies regularly evaluate Brazil and its sovereign ratings based on a number of factors, including macroeconomic trends, physical and budgetary conditions, debt metrics and the prospect of changes in any of these factors.

The rating agencies began to review Brazil’s sovereign credit rating in September 2015. Subsequently, the three major rating agencies downgraded Brazil’s investment-grade status. On January 11, 2018, Standard & Poor’s, or S&P, downgraded Brazil’s credit rating from BB to BB-negative, besides changing the outlook from negative to stable, citing delay in the approval of fiscal measures that would rebalance public finances. In December 2019, S&P revised Brazil’s rating outlook from stable to positive and maintained the credit rating at BB-, considered speculative grade, citing that the government continues to implement fiscal consolidation measures that have helped reduce the country’s still high deficit, which together with lower interest rates and gradual implementation of the reform agenda should contribute to stronger growth and investment prospects over the next three years, in addition to a gradual improvement in fiscal results.

In April 2018, Moody’s reaffirmed Brazil’s Ba2 rating, changing the outlook from negative to stable.

In 2018, Fitch Ratings, or Fitch, downgraded Brazil’s sovereign credit rating to BB-positive with a negative outlook, citing the rapid expansion of the country’s budget deficit and the worse-than-expected recession. In November 2019, Fitch reaffirmed Brazil’s BB- rating, with stable outlook. In the first half of 2020, Fitch revised the outlook from stable to negative due to deteriorating economic prospects, political uncertainties, including tensions between the Executive Branch and the National Congress and uncertainties regarding the duration of COVID-19. In May 2021, Fitch’s affirmed Brazil’s BB- rating with a negative outlook.

As a result of Brazil losing its investment grade status with the three major rating agencies, the trading prices of debt and equity securities issued by Brazilian issuers have been adversely affected. Any extension of the current Brazilian recession could lead to further downgrades of the ratings, while any further decline in Brazil’s sovereign credit rating could increase investors’ risk perception and, consequently, may increase our future borrowing costs and materially adversely affect us.

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Brazil’s economy is vulnerable to external shocks that may have a material adverse effect on its economic growth and us.

The globalization of capital markets has increased vulnerability to adverse events. The economic crisis that impacted on Brazil in 2014 caused a reduction in liquidity, a credit crisis and an economic recession in developed countries, which negatively affected emerging markets. Financial losses and cash shortages, together with the bankruptcies of financial and non-financial institutions and a decline in the economy have increased risk aversion and resulted in more cautious lending practices.

In addition, fiscal problems in a number of countries, particularly in Europe, have heightened concerns regarding the fiscal sustainability of weaker economies and have reduced the confidence of international investors, generating volatility in the markets. This environment may affect our ability and the ability of other Brazilian financial institutions to obtain financing in the international capital markets, restricting the credit market.

The occurrence of negative effects such as these may lead to a deterioration in Brazil’s economic conditions. The resulting impacts, such as a decrease in the payment capacity of the banking system’s customers, would have a direct impact on our business, limiting our ability to achieve our strategies and materially adversely affecting us.

Events and the perception of risks in other countries, particularly in emerging market countries, may have a material adverse effect on the market price of Brazilian securities, including those issued by us.

The market value of securities issued by Brazilian companies is influenced, to varying degrees, by the economic and market conditions in other countries, including the United States, European countries, Latin American countries and emerging market countries.

Investors’ reactions to the events in these other countries may have an adverse effect on the market value of Brazilian companies’ securities. The prices of the stocks traded on B3, for example, have historically been sensitive to fluctuations in U.S. interest rates, as well as to variations in major U.S. stock exchanges. Moreover, crises in other emerging market countries may reduce investors’ interest in the securities of Brazilian companies, including those issued by us, which may negatively affect the market price of the shares issued by us. In addition, the instability or volatility of the global financial markets may further increase the negative effects on Brazil’s financial and economic environment, which may materially adversely affect us.

Our business may be impacted by political events, war, terrorism, public health issues, natural disasters and other business interruptions.

War, terrorism, geopolitical uncertainties, public health issues and other business interruptions have caused and could cause damage or disruption to the economy and commerce on a global or regional basis, which could have a material adverse effect on our business, our customers, and companies with which we do business. For instance, the current crisis caused by Russia’s invasion of Ukraine has caused high levels of market volatility and uncertainty and could continue to adversely impact global financial and capital markets.

Additionally, our business operations are subject to interruption by, among others, natural disasters, fire, power shortages, earthquakes, floods, nuclear power plant accidents and other industrial accidents, terrorist attacks and other hostile acts, labor disputes, public health issues and other events beyond our control. Such events could decrease demand for our products and services or make it difficult or impossible for us to deliver products and services to our customers. In the event of a natural disaster, we could incur significant losses, require substantial recovery time and experience significant expenditures in order to resume operations.

Exchange rate instability may have adverse effects on the Brazilian economy, us and the price of our Class A common shares.

The Brazilian currency has been historically volatile and has been devalued frequently over the past three decades. Throughout this period, the Brazilian government has implemented various economic plans and used various exchange rate policies, including sudden devaluations, periodic mini devaluations (during which the frequency of adjustments has ranged from daily to monthly), exchange controls, dual exchange rate markets and a floating exchange rate system. Although long-term depreciation of the real is generally linked to the rate of inflation in Brazil, depreciation of the real occurring over shorter periods of time has resulted in significant variations in the exchange rate between the real, the U.S. dollar and other currencies. For more information about the exchange rate between the real and the U.S. dollar, see “Item 4. Information on the Company—Business Overview—Exchange Rates.”

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A devaluation of the real relative to the U.S. dollar could create inflationary pressures in Brazil and cause the Brazilian government to, among other measures, increase interest rates. Any depreciation of the real may generally restrict access to the international capital markets. It would also reduce the U.S. dollar value of our results of operations. Restrictive macroeconomic policies could reduce the stability of the Brazilian economy and harm our results of operations and profitability. In addition, domestic and international reactions to restrictive economic policies could have a negative impact on the Brazilian economy. These policies and any reactions to them may harm us by curtailing access to foreign financial markets and prompting further government intervention. A devaluation of the Brazilian real relative to the U.S. dollar may also, as in the context of the current economic slowdown, decrease consumer spending, increase deflationary pressures and reduce economic growth.

On the other hand, an appreciation of the Brazilian real relative to the U.S. dollar and other foreign currencies may deteriorate the Brazilian foreign exchange current accounts. We and certain of our suppliers purchase services from countries outside Brazil, and thus changes in the value of the U.S. dollar compared to other currencies may affect the costs of services that we purchase. Depending on the circumstances, either devaluation or appreciation of the real relative to the U.S. dollar and other foreign currencies could restrict the growth of the Brazilian economy, as well as our business, results of operations and profitability.

Our ability to make payments may be limited by liquidity constraints in Brazil in the occurrence of an event that could lead to an exodus of capital from Brazil and/or induce the Central Bank to effect a sudden and substantial increase in the basic interest rate of the Brazilian economy.

The occurrence of an event that could lead to an exodus of capital from Brazil and/or induce the Central Bank to effect a sudden and substantial increase in the basic interest rate of the economy could have repercussions on local liquidity conditions. These financial uncertainties, which could be both external and internal, may increase liquidity risks, adversely affecting the main sources of funds, particularly short-term deposits, and raising financing costs, which may have a material adverse effect on our profits as well as our liquidity levels.

In addition, negative events affecting the Brazilian economy may directly or indirectly affect certain customers’ ability to honor their financial commitments with us, which can materially adversely affect us.

A substantial increase in inflation could materially adversely affect us.

Brazil has been experiencing high rates of inflation. A number of measures and plans were adopted by the Brazilian government in order to combat inflation, which negatively affected the Brazilian economy. Although the Brazilian inflation targets system that was adopted in 1999 has been relatively successful in controlling inflation, there is no guarantee that inflationary pressures will not affect the Brazilian economy in the future. At present, the Central Bank adjusts monetary policy to ensure that inflation rate remains in line with a predetermined target that is announced publicly. Brazil’s inflation was 10.0%, 4.5% and 4.3%, in the years ended December 31, 2021, 2020 and 2019, respectively, according to the Broad National Consumer Price Index (Índice de Preços ao Consumidor), or IPCA.

If, however, the Brazilian government fails to control inflation, we may be materially adversely affected due to a negative impact on our ability to meet our obligations given certain of our agreements are adjusted by the inflation indices. Inflationary pressures may also reduce our ability to access foreign financial markets, affect our customers’ ability to meet their obligations and lead to further government intervention in the economy, including the introduction of economic policies that may materially adversely affect the performance of the Brazilian economy as a whole and, consequently, us.

Shortcomings in infrastructure and labor in Brazil may have an impact on the growth of the Brazilian economy, with a material adverse effect on us.

Overall, our performance is strongly influenced by the growth of the Brazilian economy. Brazilian GDP growth has fluctuated in recent years, with Brazil recording GDP growth of 4.6% in 2021, a reduction of 4.1% in 2020 and a GDP growth of 1.1% in 2019. Any growth is limited by inadequacies in infrastructure, including possible energy shortages and deficiencies in the transport, logistics and telecommunications sectors, the lack of skilled manpower and of public and private investment in these areas and in education, limiting productivity and efficiency.

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Any of these factors could result in volatility in the labor market and have an aggregate impact on income, purchasing power and consumption levels, which may materially adversely affect us due to restricted growth in the economy and a resulting increase in default rates.

Exposure to risk arising from the Brazilian government’s indebtedness may materially adversely affect us.

In the event the Brazilian government fails to make payments due to holders of bonds issued by the Brazilian National Treasury in order to finance public debt, we may be materially adversely affected in light of our investments in these securities.

In addition, a significant decrease in the market value of Brazilian government securities allocated in our portfolio could result in negative adjustments to the market value of these securities, which could materially adversely affect us.

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The new version of the Corporate Reorganization is further described in the post-effective amendment to the registration statement on form F-4 and its accompanying prospectus filed by Inter & Co on April 15, 2022 (file number 333-260701), which registration statement and prospectus are not incorporated by reference in this annual report.

History of Banco Inter

Banco Inter was founded in September 1994 by MRV Engenharia S.A. (“MRV Engenharia”), to initially act as a loan, finance and investment company under the name Intermedium Crédito, Financiamento e Investimento S.A. (“Intermedium Financeira”). Intermedium Financeira specialized in providing credit for the purchase of goods, services and working capital. The Central Bank authorized our operations in January 1995, and we initiated our loan and financing operations that year, providing personal loans, working capital loans, Direct Consumer Credit (Crédito Direto ao Consumidor) to storeowners and direct consumer credit for companies to onlend to their customers. Below a summary of the main developments in our business since 2019.

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Our principal capital expenditures are made in developing our digital platform. For more information, see “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Capital Expenditures.”

B.Business Overview

Overview

Our mission is to bring the breadth of possibilities of the offline world to the palm of our customer’s hands, with the convenience and scalability of a digital native mobile experience.

We began our Inter journey as a regional neobank, which is a financial institution that operates exclusively online, without a physical branch network. We were attracted to a market that we believed was ripe for disruption given the lack of focus on what truly mattered: the customer. This market has a high degree of market concentration among incumbents in the Brazilian financial industry. We believe that these incumbents have significant legacy infrastructures, which hinder their ability to build and deploy technology to reduce costs and enable the creation of an architecture scalable enough to serve the full extent of the addressable market.

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We have quickly understood that consumers generally seek a singular online experience to digitally solve their daily complexities, from paying bills in a fully digital format to buying daily essentials through an integrated e-commerce solution. With the strategic motivation of satisfying these customers, we have built our Super-App, which we believe is the most comprehensive mobile application globally by breadth of services. Our Super-App allows our customers to capitalize on the full extent of our technology to solve many of their daily financial and non-financial needs, transcending financial services into e-commerce and broader internet-related solutions across our six ecosystem verticals, which interact in highly synergistic and self-reinforcing fashion. Our six ecosystem verticals are:

For information on our operating segments and the breakdown of revenue for each segment for 2021, 2020 and 2019, see “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Our Operating Segments”

We strive to deliver this ever-growing immersive digital experience to our customers, through a concept that we refer to as “Everything, Everywhere.”

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Our Products and Solutions

The Super-App is our digital native ecosystem with two overarching strategic principles, which drive our motivation on how to best serve our customers: (i) crafting our customers the ability to intuitively navigate our digital ecosystem to find “Everything, Everywhere,” (ii) obtaining a diversified and predictable revenue stream, which is highly transparent, and aligned to deliver the most value to our customers. This results in our ability to capture our customers “digital attention” throughout the day, as they interact with our myriad of products and services, forming an organic and symbiotic relationship.

We have built a rapidly growing ecosystem of intertwined financial and non-financial services and products, which we designed to allow customers to solve many of their daily needs in one Super-App. Since our initial public offering in Brazil, we have launched new product functionalities and services, an effort that is powered by over 1,300 technology focused team members.

Our corporate agility and technological capabilities have enabled us to perform a full cycle of product development in a very short timeframe. With the extensive use of data, our employees are able to quickly measure the results of our product launches, getting quick feedback from our customer base, reassessing the potential of the product, making improvements and focusing our resources to deliver the best solutions to our customers. Our overarching strategic principle as it pertains to new product launches encapsulates creating opportunities for significant upside optionality from a monetization perspective, with very limited initial capital deployment and no interference in our existing, highly curated and intuitive customer journey. This process also enables us to enter in many verticals, basing our decisions on extensive data which support attractiveness of an opportunity prior to capital allocation and scaling.

Our product launching capabilities and speed to market is enabled by an entrepreneurial team and our access to modern cloud-based tech-stack backed by a modular architecture that enables our approach of continuously expanding our products and services to flourish. Our application layer is composed of over 2,600 microservices in a modern, decoupled and cloud-native architecture enabling agility, security and scalability to foster our business avenues. As we develop and launch new products, we only need to add new microservices and plug in to the current infrastructure, without rebuilding the existing one. This modularity was a critical part of what allowed Inter expand into the six verticals with the agility of a plug-and-play model and will continue playing an important role on our journey. Since our Super-App launch in 2015, we had a total 125 features and a total of 2,676 deployment of updates to our Super-App.

Currently, we divide our ecosystem in six verticals which drive engagement, customer retention and maximize our long-term unit economics.

Banking

When we conceived our foundational product, millions of customers in Brazil were unbanked or poorly served by legacy financial institutions. This is still the case, but we believe we have been a catalyzer and one of the key contributors to the democratization of transparent financial services in Brazil over the last five years.

Our solution provides customers, with a tech enabled digital account for individuals and small businesses, empowering them to access a wide range of useful products, including bill payments, transfers, withdrawals, debit cards, instant payments, or PIX, pre-paid mobile recharge credits, among others.

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We believe that these features accelerate financial freedom to our customers. This because our customers are able to use their digital accounts to build an online transaction and credit history. These enable access to other services in our ecosystem, such as pre-approved credit limits, Buy-Now-Pay-Later within our e-commerce vertical, which drives engagement, customer life-time value and ultimately our full profitability potential.

Our digital native, customer-centric culture allowed us to deliver these services with a highly differentiated user experience, as evidenced by our NPS of 83 points in December 2021, and, in 2021, we had over 1.5 billion logins in our Super-App and over 8.8 million active customers.

We have managed to develop a truly global payments platform combining a fully digital backbone with integration with other payments platforms.

In addition to our role as a card issuer, we also have a 45% equity stake, since 2020, in a payments company with focus on credit card acquiring, called Granito. Founded in 2015, Granito operates in the credit card acquiring sector, developing customized products for its customers. This acquisition aimed to enhance the experience of business account holders, who will have an even more complete offer of products and services and strengthen Inter Shop.

Our uniquely built payments ecosystem is translated into our numbers. In the fourth quarter of 2021, 5.4 million different credit and debit cards we issued were used to make purchases or payments, an 83% growth compared to the same quarter of 2020.

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Credit

The wealth of data we are able to garner from our customers across the aforementioned verticals has powered our ability to get to know our customer very well, albeit in a digitally and data-enabled fashion. Additionally, we believe the strength of our primary digital banking customer relationship generates a strong competitive advantage in enabling us to grow our portfolio and extract optimized risk-adjusted lending decisions and return profiles.

Our product lines within this vertical include real estate, SME, payroll, and credit card. Our loan portfolio has reached R$17.2 billion as of December 31, 2021, representing a 96% growth compared to December 31, 2020.

Our credit growth was sustainable with a significant improvement of credit quality over time, with our NPL over 90 days staying at 3.0% as of December 31, 2021, and our coverage ratio (the ratio between our provisions and NPLs over 90 days) reaching 131% on the same date.

E-commerce and on-demand services platform

In November 2019, we launched our e-commerce and on-demand services platform. Our initial vision for the e-commerce offering stemmed from our desire to continue increasing our ability to leverage on our primary banking relationship status to improve our ability to garner customer attention, frequency, recurrence and bundling.

Since then, our e-commerce has grown to offer other on-demand services and delivered R$3.5 billion in our gross merchandise value, or GMV, in 2021, representing a 201% increase compared to the year ended December 31, 2020. This figure is particularly relevant given the size of the Brazilian e-commerce market, which was R$125.9 billion in 2020, according to Euromonitor.

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Our relevance in the market from a GMV standpoint enables us to generate significant revenues from bringing customers and sellers together, and such revenues can be used to boost our margins or to provide customers with cashback to increase engagement and retention.

The integrated e-commerce & on-demand services platform experience allows us to maximize the array of potential offerings to our customers. For example, we can offer our customers differentiated BNPL payment options in a closed-loop channel, which drives margin and enhances returns. We can also use the e-commerce & on-demand services platform vertical to provide customers with incentives to save and fund our balance sheet via deposits.

Since having launched our integrated e-commerce & on-demand services experience, we have enhanced this vertical to become what we believe to be a very broad internet hub offering customers digital arcade gaming, gift cards, travel & leisure, food delivery, restaurant loyalty subscriptions, mobile connectivity, cash back on gas refueling, among others. We have also leveraged our cashback policies to boost our growth, attracting new customers and enhancing the adoption of Intershop by current banking customers.

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Investments

Inter Invest was conceived as an all-in-one platform to offer a complete range of solutions and products in our distribution channel.

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Our investment platform in Brazil offers customers the ability to invest in over 400 investment funds from 140 different asset managers, including fixed-income funds, mutual funds, top-tier hedge funds, direct investments in bonds and stocks. Additionally, through our Super-App we enable our customers to seamlessly access Apex’s platform, which allows our customers to open an account with Apex and access a stock trading platform provided by Apex for investments in the United States in selected stock exchanges (currently Nasdaq and NYSE) within our Super-App. This feature allows customers to further diversify their risk into stocks in the United States and allocation strategies via the Apex platform.

Education in the form of research and community engagement is a core part of our experience, as many of our customers are first-time investors and require educational information and suggestions about optimal investment portfolio allocation.

As of December 31, 2021 we had 2.0 million active customers in our Investments vertical, representing more than 60% growth since December 31, 2020 and a penetration, defined as active investment customers divided by total customers, of 11.9% - which highlights the growth potential of the segment even within our own current customer base. In terms of AUC, as of December 31,

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2021, we have reached R$56.9 billion, corresponding to a 29.2% growth compared to December 31, 2020, with R$5,890 in average holdings per active customer as of December 31, 2021.

In addition to offering customers a wide range of investment alternatives, in a transparent and low-cost format, this vertical stimulates cross-selling and helps us to achieve the position of primary bank of choice for our customers, leading to more frequency, higher retention and lower churn over time.

One example of the synergistic aspects of this vertical can be seen in how we incentivize customers to build their investment portfolios within our ecosystem, by providing active customers with unique credit card products, which leads to better engagement and average revenue per customer.

All our initiatives and strong efforts on Inter Invest were well recognized: we’ve been elected the Best Digital Brokerage in Brazil by iBest in 2021. And we will keep developing new solutions to support our customers in their investments needs, aiming to continuously increase the penetration of investors over time.

Furthermore, revenue from our investment platform grows consistently as we add new functionalities and products with the aim of becoming the most complete investments platform in Brazil, being the only one with a hosted international stock trading platform, structured products, trading robots and many other features directly available in the Super-App.

Insurance Brokerage

Supplementing our core digital banking offerings, we also offer, as a broker, an in-app insurance product suite (Inter Seguros) focused on low complexity and high recurrence products at the same time as offering a complete portfolio and without assuming underwriting risks.

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Inter Seguros acts as an insurance broker in Brazil for 18 different insurance solutions tailored to each specific customer journey while offering an integrated experience. By continuously monitoring customer transactions and data, we frequently reassess our current portfolio and include new products.

We continue enhancing our insurance platform and transforming the way our customers engage with financial services by removing transaction costs at each transaction journey that our customers take with us such as embedding a gadget insurance in an Inter Shop purchase or embedding a travel insurance in an Inter Travel sale (Inter Travel is our platform to sell airline tickets).

Besides our current insurance products, Inter Insurance also provides a platform for health and wellness products. This wellness platform already offers solutions such as dental and health plans, and we also expect to launch a telemedicine solution.

In fact, we have experienced an increased penetration of cross-sell within this product line, which has allowed us to continue to grow our customer lifetime value, while benefiting from increased cost scaling across our platform. The revenues of Inter Seguros in 2021 were more than 4.2 times its revenues in 2019. We were also able to increase the number of active customers in our insurance vertical to approximately 839 thousand on December 31, 2021 from 255 thousand on December 31, 2020.

We have also established important partnerships with Liberty Seguros and Sompo Seguros to offer their products, some of them with exclusivity agreements for 15 years. We have also partnered with Wiz – which has a 40% stake in Inter Seguros to boost our insurance distribution platform. We strongly believe that our insurance platform will be an important source of diversified and long-term revenue stream over the next years, with other solutions and growth levers being developed over time.

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Cross-border services

With our comprehensive Super-App, we see an immense opportunity to leverage on everything that we learned and delivered throughout our journey in Brazil into other regions of the world. In January 2022, we acquired USEND, a remittance platform and global digital account with almost 150,000 customers, in order to accelerate our expansion plan and to be the stepping stone of our global strategy.

USEND is an U.S.-based company with experience in the foreign exchange and financial services, offering, among other products, a digital global account solution for carrying out money transfers between countries. USEND also has licenses to act as a money transmitter in more than 40 U.S. States, and offer U.S. residents services such as digital wallet, debit card, bill payment, among others.

We plan to use USEND as a stepping stone to our financial activities in the United States, expanding the offer of financial and non-financial products for both U.S. residents and its Brazilian customers, integrating USEND’s solutions to our platform.

We have already integrated USEND with GO Inter, our U.S. e-commerce and on-demand services platform that has over 100 international brands, as a first step to take our Super-App experience into the United States. USEND customers will now be also able to use their balances to shop in eleven categories of consumer goods, which we believe should increase user engagement and create momentum for growth in the United States.

Our Subsidiaries and Key Investees

Banco Inter

Banco Inter S.A. was incorporated as a corporation (sociedade por ações) in the Federative Republic of Brazil on September 16, 1994. Banco Inter’s common shares, preferred shares and units (comprising two preferred shares and one common share) are listed on B3’s Nível 2 segment under the symbols “BIDI3,” “BIDI4” and “BIDI11,” respectively. Banco Inter’s shares and units have not been subject to any significant trading suspensions in the prior three years. Its principal executive office is located at Avenida Barbacena, No. 1.219, 22nd floor, Belo Horizonte - MG, Brazil 30190-131. Its investor relations office can be reached at ri@bancointer.com.br and its website address is ri.bancointer.com.br. The information contained on, or accessible through, such website is not incorporated by reference into this annual report and should not be considered a part of this annual report.

Inter Seguros

Inter Seguros operates in various types of insurance brokerage through a specialized and structured team to serve several business sectors, including, but not limited to: corporate insurance, digital insurance and bank insurance. We have (through Banco Inter) a 60% equity stake in Inter Seguros. The remaining 40% is held by Wiz.

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Inter Seguros’ main focus is on the commercialization of insurance through our digital platform, offering the sale of insurance in support of the real estate and corporate business as agent, in addition to the other branches of insurance commercialized through the mobile application and internet banking.

Inter DTVM

Inter DTVM is a securities distributor and funds administrator, established in August 2013, licensed by the CVM, which allows us and our subsidiaries to operate a digital platform in the investment market. The Central Bank authorized Inter DTVM to operate as a distributor of securities on November 20, 2013, having effectively started operations on the same date. The main activities of Inter DTVM are fiduciary management, asset management, distribution of investment products, controlling, custody, bookkeeping, and public offerings.

Inter Asset (formerly DLM)

Inter Asset is an asset manager that operates with investment funds, private wealth management, managing investment funds and private pension plans. Inter Asset’s purpose is to manage (i) securities portfolios and resources for third parties; and (ii) investment funds in general in the financial and securities market. We indirectly hold (through Banco Inter) approximately 70% of Inter Asset through Asset Holding (formerly Matriz).

Inter Shop

Inter Shop’s objectives includes, among other activities, sales promotion of non-financial products and services through partnerships available in our app. The sales experience and connection with our commercial partners occurs in three ways: (i) Gift Cards, (ii) Affiliates and (iii) End-to-end. The first is the sale of prepaid cards from physical stores and/or online within the Inter application, for their use in the partner store’s purchasing environment. In the second partnership model, Inter’s customer searches in our Super-App for the e-commerce page of the store from which they want to make a purchase and the customer is then redirected to the website of the selected store (not hosted within our Super-App). The latter model involves building the entire customer purchase experience within the Inter application.

Inter Shop also operates a coffee shop in Belo Horizonte through its subsidiary Inter Café Ltda. (“Inter Café”), an online retailer that sells Inter branded products (such as gadgets, notebooks and apparel) through its subsidiary Inter Boutiques Ltda. (“Inter Store”) and a food vertical through its subsidiary Inter Food S.A. (“Inter Food”).

Granito

On March 5, 2021, we acquired (through Banco Inter) a 45% equity stake in Granito, a company that operates in the card acquirer segment, developing products customized to its customers. Our investment in Granito is part of our strategy of acquiring or investing in innovative companies with a technology focus. Granito operates as a credit card acquirer, developing customized products for its customers, which enhances the experience of corporate account holders who will have access to a wider range of products and services. We hold a 45% equity stake in Granito, which was approved by the Central Bank on February 5, 2021.

Meu Acerto

On February 12, 2021, we acquired (through Banco Inter) a 60% equity stake in Meu Acerto. Meu Acerto operates using a “winback” model (that is, a strategy to bring the customer back), which comprises the core of our customer retention strategy. Meu Acerto’s founders (who are also Meu Acerto’s executives) hold the remainder of Meu Acerto’s capital stock.

IM Designs

On July 1, 2021, we acquired (through Banco Inter) a 50% equity stake in IM Designs. IM Designs is a company specialized in the development of new technologies and immersive tools which use 3D technology to develop project to visualize environments with virtual reality, augmented reality and mixed reality. IM Designs also has a partnership with Autodesk®, a provider of engineering and architecture software, through which IM Designs is part of Autodesk’s® beta-tester group.

We will start investing in new technologies to transform the user experience of our ecosystem and maintain our Super-App up-to-date with the latest technologies.

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USEND

On January 26, 2022, we (through Banco Inter) concluded the acquisition of 100% of the share capital of Pronto Money Transfer Inc., a California corporation, or USEND, for a combination of cash and options convertible into Banco Inter units (including as a result of their participation in Banco Inter or Inter & Co’s stock option plans). Certain managers, including the founders of USEND, will continue to manage the business as officers of USEND after closing. USEND is a U.S. based financial technology company, with operations in the U.S., Brazil and Canada, which provides foreign exchange and payment services, offering, among other products, a digital account solution for both international money transfers and domestic use. USEND has licenses to act as a money transmitter in more than 40 states in the United States, and can offer U.S. residents services such as digital wallet, debit card, bill payment, among others. With the acquisition of USEND, we plan to expand our offering of financial and non-financial products to USEND’s customers and integrate USEND’s solutions in our platform.

Our Customer Service and Support

The Brazilian banking market has been the center stage of digital banking revolution, driven by solid market fundamentals. Our strategy within the digital banking landscape aims to tackle such challenges and provide a better day-to-day banking suite, providing innovative solutions and platforms to be more connected with customer demands.

Digital service is our main channel of contact with customers. We continually seek ways to improve our channels to better serve customers. In 2019, we launched our virtual service assistant, Babi, which brought greater robustness and agility to the service, automating a portion of the calls, via chat, reducing customer waiting time. In 2020, Banco Inter increased the capacity of its virtual service assistant, Babi, which brought greater robustness and agility in service, automating part of the calls via chat and reducing the waiting time for customers. In 2021, Inter focused on expanding service channels, integrating new BPOS, developing and integrating with the new CRM, and service tools, such as Salesforce, both with the aim of creating more stability, reduce queues and increase performance and quality.

Our chatbot presented promising results by being used in 56% of the calls and requests on our website – a result equivalent to the work of a team of 6 people, acting at the limit of their capacity.

As more than 96% of our interactions are solved in the first contact, we believe that currently most of our customers’ basic demands and transactions are already being solved through our virtual assistant, which reduces our costs.

These results come from a collaborative movement throughout Inter which led to all areas to make their decisions and design products around seeking customer satisfaction and tackling known areas of customer dissatisfaction. This process works thanks to a strong governance policy that ensures quality monitoring in order to keep our business growing and leveraging innovation.

Geographic Presence

We are headquartered in Belo Horizonte, in the state of Minas Gerais, Brazil, and this is our only core physical operation. Our digital strategy completely eliminates the need of physical branches and allows us to achieve broad national coverage with low operational costs. We are present in over 99% of Brazilian cities.

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Technology

Technology is a backbone of our operations, being one of the main pillars to support our growth strategy, with a modern, agile, scalable, and digital business model to provide the best solutions to our customers. Through constant investments and new developments, technology enables our unique approach to be constantly and continuously evolving to offer product differentiation.

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We have built a rapidly growing technology ecosystem of intertwined financial and non-financial services and products which we believe allows customers to solve many of their daily needs in one unique Super-App. We believe our software architecture is innovative and very well integrated, as it includes solutions such as cloud storage, artificial intelligence for data analysis, security systems that enable integration with technology tools from vendors and partners, among many others. We also continuously invest in the modernization of software and technology that allow greater security, reliability and performance of processes and operations, including strong efforts in our cloud-based infrastructure, paving the way for us to capitalize on business opportunities and support growth by being a stable, scalable, asset-light platform that we consider secure.

Competition

The financial and banking services market in Brazil is highly competitive. As of December 31, 2021, there were 456 service banks offering commercial banking, retail banking, investment banking and other services, 162 commercial banks and several financial institutions offering brokerage services, leasing, deposits, savings, insurance, foreign exchange, and fintechs which are increasingly prevalent in Brazil.

Although there are a large number of institutions, the financial services market in Brazil is heavily concentrated. Despite this market characteristic, we have significant market positioning, differentiating ourselves from our competitors in each of our operating segments.

The main competitors by vertical are listed as follows:

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Intellectual Property

In Brazil, ownership of trademarks is evidenced only through a validly approved registration within the INPI, the federal agency responsible for registering trademarks and patents in Brazil. After registration, the owner is assured in most cases exclusive use of the trademark throughout Brazil for a period of ten years, renewable for successive periods. During the registration process, the person filing for trademark registration merely has an expectation of the right to use the trademarks applied for to identify its products or services specifically in the requested class. Aforementioned parameters are not applicable to highly renowned brands and common expressions that may be registered but will not be awarded exclusive use by its owners.

As of April 8, 2022, we have rights over 194 trademarks. 78 of them are already registered with the INPI. In addition, we have requested the registration of 116 other trademarks pending a decision.

Some of our applications for trademark over the brand “Inter” have been rejected by the INPI, including our application for trademark over the brand Inter for use in connection with financial services. In December 2021, we commenced a lawsuit seeking to prevent that the brand “Inter” be recognized as an exclusive brand for financial services, so that no third party can have exclusive rights over the brand Inter recognized for use in connection with financial services.

We are seeking recognition of our trademarks internationally in multiple administrative procedures in the patent and trademark offices of Canada, United States of America, Mexico, United Kingdom, European Union, Argentina, Chile, Colombia, Paraguay and Uruguay.

In addition, we own a variety of domain names through NIC.Br, the Brazilian entity responsible for the registration of domain names in Brazil. Our domain names include “bancointer.com.br,” “tarifometro.com.br,” “imoveisinter.com.br,” “guiadocredito.com.br,” and “contacomagente.com.br,” each of which are valid and in full force.

While we are unable to quantify the impact of a loss of our rights to our intellectual property, any such loss may restrict our ability to use such intellectual property and other financial and/or operation losses, including as a direct result of the loss of customers and damage to our image and reputation.

Legal and Administrative Proceedings

We are subject to civil, labor and tax claims, including legal and administrative proceedings arising in the ordinary course of our business, for which we recorded provisions in the total aggregate amount of R$21.7 million as of December 31, 2021.

We record provisions in our balance sheet for losses arising from litigation in accordance with IAS 37 – Provision for Contingent Liabilities and Contingent Assets. In establishing provisions, we consider the opinion of our legal advisors, the nature of the lawsuits, the similarity with previous proceedings, the complexity and the position of the courts, and the assessment of the probability of loss. The provisions are measured at the best estimate of the disbursement required to settle the present obligation at the balance sheet date, considering: (i) the risks and uncertainties involved; (ii) where relevant, the financial effect produced by the discounted present value of future cash flows required to settle the obligation; and (iii) future events that may change the amount required to settle the obligation.

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To this end, with respect to civil and tax proceedings, we take into consideration our legal proceedings precedents as well as the evolution of jurisprudence, with due regard to applicable laws and regulations. With respect to labor proceedings, whenever the lower court renders a decision that is unfavorable to us, a detailed assessment of the claimed damages is made, and we record a provision based on a calculation of the claimed damages.

The following table shows the aggregate amount of the provision established for probable losses in respect of our tax, labor and civil proceedings:

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For more information on our provisions for legal and administrative proceedings, see note 23 to our Audited Financial Statements.

Tax Proceedings

As of December 31, 2021, we had no provisions for tax proceedings for which our chance of loss has been deemed probable by our management and our external legal counsel. We are party to other tax proceedings for which our risk of loss has been estimated as possible by our management and our external legal counsel and for which we have no amount provisioned.

On August 30, 2013, we received a tax assessment from the Brazilian Federal Revenue Service (Receita Federal do Brasil) to collect corporate income taxes (Imposto de Renda Pessoa Jurídica - IRPJ) and the social contribution on net profit (Contribuição Social Sobre o Lucro Líquido - CSLL), plus penalties and interest in arrears, relating to fiscal years 2008 and 2009, based on allegations that we had deducted some expenses considered non-deductible. This tax assessment has been challenged at the administrative level by us and eleven of Banco Inter shareholders who have been deemed to be jointly and severally liable for such tax payments. On August 17, 2021, we were served on a tax collection proceeding, brought by the federal tax authorities related to this tax assessment. In order to suspend such tax collection proceeding while we challenge the merits of the collection, we have obtained an insurance policy covering the possible final payment. We have evaluated the likelihood of loss as possible. As of December 31, 2021, this proceeding involved an aggregate amount of R$63.8 million.

We are involved in multiple administrative and judicial proceedings relating to payments of COFINS in different fiscal years from 1999 to 2014. COFINS is a federal social contribution calculated over revenues. These proceedings include tax assessments and tax collection proceedings brought by federal tax authorities against us for principal, interest and penalties (which may reach up to 75% of the principal amount), based on allegations of deficiencies in our payments of COFINS, as well as challenges to tax credits we used to set off certain payments. In most of these cases, the tax authorities claim COFINS payments over our financial revenues, which we argue to be unconstitutional and illegal. We have challenged these proceedings administrative and judicially, and these proceedings are at different stages. In order to suspend tax collection proceedings while we challenge the merits of the collection, we are required to provide guarantee, insurance or post bond to secure the final payment. We have evaluated the likelihood of loss as possible. As of December, 31, 2021, these proceedings involved an aggregate amount of R$260.2 million, and a total amount of R$62.1 million was guaranteed by insurance policies. For additional information, see Note 23d. to our Audited Financial Statement.

Labor Proceedings

As of the date of this annual report, we are not party to any labor proceeding that when considered individually is material to us. As of December 31, 2021, the aggregate amount sought by plaintiffs in labor proceedings were R$20.1 million, including disputes related to third-party service provider claims seeking recognition of employment status, employee overtime and equal pay claims. As of December 31, 2021, we had provisioned an amount of R$3.3 million for labor claims.

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Civil Proceedings

As of the date of this annual report, we are not party to any civil proceeding individually material to us. As of December 31, 2021, we are party to approximately 9 thousand civil proceedings brought by customers, in which claimants sought aggregate damages of R$388.9 million, most of which consisting of claims under Brazilian consumer protection laws related to our payroll products, including our Payroll Card, and our real estate credit portfolio, our digital account and multiple card. As of December 31, 2021, we had provisioned an amount of R$18.4 million for civil claims.

As of December 31, 2021, we are also party to 95 individual proceedings relating to our former correspondent broker Filadelfia (further described below).

Public Civil Actions

In addition to the Filadelphia Civil Public Action further described below, we are a defendant in nine other public civil public actions in which claimants asked for aggregate damages of R$19.3 million as of December 31, 2021 (taking into consideration the liability of co-defendant financial institutions and without taking into consideration potential settlement agreements that could change our liability). These civil public actions relate to: (1) employing allegedly abusive tactics in connection with the failure to provide information relating to outstanding balances for the early settlement of customer indebtedness; (2) alleged unlawful collection of amounts designated as “legal, judicial or extrajudicial fees,” “expenses incurred for administrative collections and summons of the debtor, including collection fees and legal fees” and “legal fees and collection costs”; (3) alleged violation of the rights of retirees and pensioners as a result of onerous indebtedness incurred by them through us; (4) alleged unlawful charging of fees for “third party service fees/reimbursements” in our lending agreements; (5) alleged failure to provide services due to instability and interruption of customer access to the app; and (6) alleged abusive practice in connection with payroll loan credit cards offered to retirees in the State of Rio Grande do Sul, which allegedly were not aware of the payroll loan characteristic of the card.

Filadelphia Civil Public Action

We are a party to a public civil action challenging the validity of all payroll loans granted to customers, in transactions intermediated by Filadelphia Empréstimos Consignados Ltda., or Filadephia. Filadelphia was a correspondent broker of payroll loans for us from March 20, 2008 to February 1, 2012, as well as for some other financial institutions. Filadelphia persuaded borrowers to enter into payroll loans in order to invest the proceeds through Filadelphia and promissed to reward the investments at higher interest rates than those charged on the payroll loans. In 2011, the Brazilian Federal Police determined that Filadelphia had been conducting a Ponzi scheme and suspended the deposits. As a result, the alleged victims sued Filadephia and, in certain cases, us. While in certain proceedings the presiding judge has determined that we were liable for having selected Filadelphia as a correspondent broker, we were not involved in and we did not have any knowledge of Filadelphia’s illegal practices. Also, we did not interfere with the allocation of customer funds after they are deposited in customer accounts. Our defense that we were not involved in the alleged illegal activities is corroborated by statements made by the competent authorities examining the investment scheme, confirming that we did not engage in criminal conduct and exempting us from criminal liability. We terminated our relationship with Filadelphia the day after the Brazilian federal police initiated their operation. As of December 31, 2021, this proceeding involved an aggregate amount of R$10.0 thousand.

Settlement Agreements

As of the date of this annual report, we had entered into the following Settlement Agreements (Termos de Ajustamento de Conduta):

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Capital Expenditures

Our principal capital expenditures are made in developing our digital platform. For more information, see “Item 5. Operating and Financial Review and Prospects—A. Operating Results —Capital Expenditures.”

Regulatory Overview

See “Regulatory Matters.”

Selected Statistical Information

The tables below present select statistical information as required by the new subpart 1400 of Regulation S-K (previously Industry Guide 3).

In this section, averages are based on month-end averages, except for certain accounts which are presented based on quarter-end averages or based on the average between the beginning and end of the year amounts. The presentation of historical averages in this section on a daily, weekly or, in some cases, monthly basis would involve unreasonable effort and expense. Historically we prepared monthly financial information in accordance with the generally accepted accounting principles adopted in Brazil applicable to institutions authorized to operate by the Central Bank, or Bacen GAAP, – we did not measure all assets and liabilities on a daily or weekly basis as this information was not required under Bacen GAAP or by applicable local laws or regulations. Also, in compliance with CVM regulations in Brazil, we prepared annual financial statements in accordance with the IFRS. For some assets and liabilities the recognition, derecognition and measurement principals of Bacen GAAP and IFRS are the same, however, for certain assets and liabilities (e.g. loans and advances) there are differences between Bacen GAAP and IFRS. In this section, for accounts with no significant differences between Bacen GAAP and IFRS we present month-end averages. For certain accounts, where there are significant differences between Bacen GAAP and IFRS, the preparation of financial information in accordance with IFRS requires the collection of information from various internal and external sources, and we would not be able to obtain this information for each period without undue effort or expense. In these cases, we present averages based on quarter-end averages, in reliance on Rule 409 under the Securities Act.

Distribution of Assets, Liabilities and Equity

The return (or yield) was calculated by the amount of interest income or expense in the period divided by the average balance. The following table shows average balances, interest amounts and yields for our interest-earning assets, non-interest-earning assets, interest-bearing liabilities, non-interest-bearing liabilities and equity for the years ended December 31, 2021, 2020 and 2019.

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